US 10Y TREASURY: currently without doubts

During the previous week the market was pricing released job data in the US. Increasing unemployment rate boosted investors expectations that the Fed's rate cuts are round the corner. Also it has been confirmed through the Fed Chair Powell`s testimony to the Senate, with wording “at some point” during the course of this year. Although, initially, it was expected that the rate cut might occur in May, currently the odds are 80% that it might happen in June this year. Treasury yields were aligned accordingly. The 10Y US benchmark rate slipped from the level of 4.2% at the start of the week toward the 4.0% as of the weekend. Such a move was a clear sign that the market has no more doubts that the rate cuts are coming.

Inflation rate for February as well as retail sales in the US are set for a release in a week ahead. Any surprises on this side might impact some volatility on the markets, however, without a significant move toward either side. The 10Y Treasuries will continue to test the 4.0% with a low probability that this level might be breached. On the opposite side, some moves toward 4.1% are more probable.