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DESPITE A DECENT 30YR UST AUCTION TODAY, BOND YIELDS UPWARD MOVE STILL INTACT

ADMIN || 12th December 2025

A dovish cut from the Federal Reserve has temporarily reversed upward momentum in US long-term yields and in the US dollar. Unless macro surprises reverse their upside tilt in the US, there’s likely to be more upward pressure on yields, with the dollar moving in tow.

The 30-year Treasury auction was the first test of appetite for Treasuries after the FOMC. Demand was OK, not great. Though the yield was just below when-issued levels and 5 bps below the pre-Fed Wednesday highs, Thursday’s 30-year Treasury bond reopening came in with yields 8 basis points higher compared with last month’s new-issue sale.

For the bond momentum to extend, the jobs report on Dec. 16 will be the next data hurdle. With consensus at 50,000 for the nonfarm payrolls gain, a fall in payrolls could help extend the rally and pull forward the first full rate-cut pricing from June to April. A stronger than 50k no might reduce the current market pricing of 55 bps cut in CY26 to 45bps of cut in CY26.

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