Offline24h

USTs extended gains as risk-off sentiment deepened amid renewed political uncertainty and a string of soft U.S. data suggesting economic cooling. The 10Y yield slipped to around 3.96%(−4bp) while 2Y fell to 4.18%(−3bp), modestly steepening the curve. Weaker-than-expected initial jobless claims and sluggish housing starts reinforced the narrative that the labor market and broader economy are losing momentum, prompting investors to price in a higher probability of a December Fed rate cut. Meanwhile, Fed Governor Jefferson emphasized that monetary policy remains restrictive and that inflation progress, while encouraging, is still incomplete—remarks that tempered the dovish repricing. Heavy Treasury supply and lingering concerns over fiscal sustainability capped gains, as demand for long-dated paper remains uneven. The market also tracked geopolitical headlines after new escalations in the Middle East and continued U.S. government shutdown risks, both amplifying the bid for safe-haven assets. Swap spreads tightened across the curve, and the 3M/10Y inversion narrowed to its smallest level since April, suggesting easing front-end pressures. Overall, the tone in rates remains constructive but cautious—investors are hedging for downside growth risk while staying alert to potential supply-driven yield rebounds if risk sentiment stabilizes.