US 10-year yield tops 4%, stocks fall, as Fed rate cut expectations ease
Updated at 4:07 p.m. EDT/ 2007 GMT
Strong US jobs growth dampens recession worries
10-yr yield tops 4% for first time since early August
Dollar eases after hitting seven-week high versus yen
By Chuck Mikolajczak
NEW YORK, Oct 7 (Reuters) -A gauge of global stocks declined on Monday and U.S. Treasury yields climbed, with the benchmark 10-year note topping 4%, as investors readjusted their views for the path of interest rates from the Federal Reserve.
The U.S. 10-year note climbed to 4.033%, its highest level since Aug. 1 and first time above 4% since Aug. 8 after Friday's stronger-than-expected U.S. payrolls report fueled expectations the Fed will dial back its aggressiveness in cutting interest rates.
Expectations for a Fed rate cut of 25 basis points (bps) at the central bank's November meeting stand at 84.6%, with the market pricing in a 15.4% chance it will hold rates steady, according to CME's FedWatch Tool.
Markets were completely pricing in a cut of at least 25 basis points just a week ago, with a 34.7% chance for another outsized 50 basis-point cut after the Fed began slashing rates at its September meeting with a 50 bp cut.
"The market very quickly flipped from talking about a 50 basis-point cut to possibly no cut in November, just based on the strength of the data," said Gennadiy Goldberg, chief U.S. rates strategist at TD Securities in New York.
"It would be very strange for them to give up the ghost on additional cuts this soon after a 50-bp rate cut," Goldberg said.
On Wall Street, stocks closed lower, with energy .SPNY the sole S&P 500 sector to post a gain as crude prices continued to ascend on concerns a widening conflict in the Middle East could dent supply.
The Dow Jones Industrial Average .DJI fell 398.51 points, or 0.94%, to 41,954.24, the S&P 500 .SPX fell 55.13 points, or 0.96%, to 5,695.94 and the Nasdaq Composite .IXIC fell 213.94 points, or 1.18%, to 17,923.90.
MSCI's gauge of stocks across the globe .MIWD00000PUS fell 3.66 points, or 0.43%, to 843.74, on track for its fifth decline in six sessions. In Europe, the STOXX 600 .STOXX index closed up 0.18%, erasing early declines, although gains were capped by rate-sensitive stocks such as real estate and utilities.
The yield on benchmark U.S. 10-year notes US10YT=RR was last up 4.3 basis points to 4.024%. The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, climbed 5.7 basis points to 3.989% after rising to 4.027%, its highest since Aug. 20.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at a positive 3.3 basis points after briefly inverting for the first time since Sept. 18.
Major U.S. economic data is not scheduled to be released until Thursday, when the consumer price index is issued. Fed Chair Jerome Powell and other Fed officials have commented recently that the central bank has shifted its focus from combating high inflation to labor market stability.
Several Fed officials are scheduled to speak this week, including Governor Michelle Bowman and Bank of Atlanta President Raphael Bostic on Monday.
Minneapolis Federal Reserve Bank President Neel Kashkari said he feels the economy is resilient and the labor market, though showing some signs of weakening, is still strong, and the Fed's rate cuts are aimed at keeping them that way.
Hezbollah rockets early on Monday hit Haifa, the third-largest city in Israel, which looked poised to expand its ground incursions into southern Lebanon on the first anniversary of the Gaza war.
U.S. crude CLc1 settled up 3.71% to $77.14 a barrel and Brent LCOc1 rose to $80.93 per barrel, to settle up 3.69% on the day.
The dollar index =USD, which measures the greenback against a basket of currencies, slipped 0.05% to 102.48, with the euro EUR= down 0.03% at $1.0973.
Against the Japanese yen JPY=, the dollar weakened 0.42% to 148.09 after hitting a seven-week high of 149.13. Sterling GBP= was off 0.22% to $1.3083.
The Bank of Japan said broadening wage hikes were underpinning consumption and prodding more firms in regional areas to pass on rising labor costs, signaling the economy was making progress towards meeting the prerequisite for more interest rate hikes.
To read Reuters Markets and Finance news, click on: https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
World FX rates YTD http://tmsnrt.rs/2egbfVh
Reporting by Chuck Mikolajczak; Additional reporting by Lisa Mattackal and Pranav Kashyap in Bengaluru; Alden Bentley in New York Editing by Hugh Lawson, Will Dunham and Matthew Lewis
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
