U.S. Treasury yields moved higher on Monday to start off the first day of December as investors increased bets on the Federal Reserve cutting interest rates in its upcoming meeting.
At 5:47 a.m. ET, the 10-year Treasury was up more than 2 basis points at 4.044%, while the 30-year bond yield climbed 3 basis points to 4.702%. The 2-year note yield was up less than a basis point to 3.497%.
One basis point equals 0.01% and yields move inversely to prices.
Traders are pricing in a nearly 88% chance of a quarter percentage point cut, compared with 85% on Friday, according to the CME FedWatch Tool.
Investors will parse through several economic reports this week, starting with the ISM Manufacturing PMI on Monday at 10 a.m. ET. The ADP Employment Report follows on Wednesday and will be the most up-to-date labour market data before the Fed meets on Dec. 9-10.
The ISM Services PMI is also out on Wednesday and weekly initial jobless claims will follow on Thursday. The delayed personal consumption expenditures index for September will cap off the week on Friday.
Fed officials are in a pre-meeting communications blackout ahead of the Dec. 10 FOMC decision, which makes economic data investors’ focus for hints about what the interest rate decision will be.