Falling Initial Claims Boost Dollar Index and U.S. Bond Yields

On October 24, U.S. Treasury yields were boosted by data showing no mass layoffs. Initial jobless claims fell to 227,000 last week from an upwardly revised 242,000, below market expectations of 245,000. The data supported market expectations that the Federal Reserve will gradually cut interest rates. The Chicago Mercantile Exchange (CME) “Fed Watch” tool shows that the odds of a 25 basis point rate cut in November rose from 92% yesterday to 97% now. The dollar index also rose slightly, 10-year and 2-year U.S. bond yields rose, both slightly higher than the level before the data.