The yield on the US 10-Year Treasury fell sharply to 4.06% on Wednesday, the lowest in two weeks, as mounting evidence of a slowing labor market supported the outlook for more rate cuts by the Federal Reserve.
Data from the ADP showed that private businesses shed over 11,000 jobs per week on the month to October 25th, while Challenger data reflected an aggressive pickup in job cuts.
Also, the Michigan consumer sentiment index unexpectedly sank to it second-lowest on record in November.
The surveys were magnified in importance as the ongoing government shutdown halted the release of official data, driving credit markets to position for higher safety demand should official data confirm the economic slowdown following the imminent restart of BLS, BEA, and Census releases.
Treasury securities, particularly at the short end, were also supported by incoming purchases of bills by the Fed to make up for maturing MBS assets.
In the meantime, the auction for the new 10-year note tailed slightly.
