The yield on the 10-year US Treasury note slumped to 4.2% on Wednesday, 10bps below session highs to retest the lowest level in one month as pessimistic economic data drove lower interest rates by the Fed to return to the market's forefront. Job openings compiled by the JOLTS fell more than expected to their lowest in 10 months in July, consolidating the downturn in labor markets for the period. Additionally, factory orders contracted sharply for a second straight month. Markets continued to fully price a rate cut in the Fed's decision this month, while being split on two or three rate cuts this year. Still, a softer drop in the yield of the 30-year bond continued to steepen the US yield curve, reflecting concerns of unsustainable fiscal expansion and high inflation.
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