U.S. Treasuries recover some of last week's losses as markets bet that data recovery will boost rate cut expectations

Jinse Finance reported that, with UK government bonds leading the way, US Treasuries regained some of the ground lost last week. Despite an early setback in the corporate bond market at the start of this week—Amazon issued $12 billion in USD-denominated bonds (its first USD bond issuance since 2022)—the rebound in Treasuries was sustained. Also on Monday, an indicator measuring factory activity in New York State unexpectedly increased, reaching its highest level in a year. Nevertheless, most Treasury yields still fell by 1 to 3 basis points. Earlier forecasts suggested that, following the end of the six-week US government shutdown last week, the eventual restoration of federal economic statistics would revive expectations for another Fed rate cut next month. JPMorgan's rate strategists predict that by mid-2026, the yield on the US 10-year Treasury will fall to 3.75%, and in the most bullish scenario, could even reach 2.40%. While the fate of some US economic reports not released during the shutdown remains unclear, the Bureau of Labor Statistics stated it will publish the September data originally scheduled for October 3 on November 20. The Fed cut rates by 0.25 percentage points in both September and October to respond to signs of weakening labor demand, even though inflation remains above its 2% target.