Treasuries on pause as traders await signs of another Fed jumbo cut

Traders hit the pause button on Treasuries ahead of a series of data and Federal Reserve speakers later Thursday that may determine whether the central bank repeats a jumbo-sized interest-rate cut in November. 

US jobless claims as well as revisions to second-quarter growth numbers will shed light on the status of the economy. Then, Fed chair Jerome Powell will headline a slate of eight policymaker speakers when he gives the opening remarks at the 10th annual US Treasury Market Conference in New York. 

“The data could stir up markets given the Fed’s data-sensitivity,” Hauke Siemssen, a strategist at Commerzbank AG, wrote in a client note. “This could put question marks behind a second 50 basis-point Fed cut in November.”

Money markets are broadly split between a 25- and 50-basis-point Fed reduction at the next meeting, after raising bets on cuts earlier this week when US consumer confidence data fell by the most in three years. Traders expect three quarter-point cuts by year-end. 

Evelyne Gomez-Liechti, a strategist at Mizuho International Plc. expects the US 10-year yield to fall below 3.75% if growth numbers are revised lower than forecast and the jobless claims figure jumps more than expected. The 10-year rate was trading 1 basis point lower at 3.78% at 4:55 a.m. New York time, after jumping six basis points the previous day.