Bond traders are closely monitoring the upcoming US employment report for November as it could impact expectations for Federal Reserve interest rate cuts.
The market is currently indicating a 65% chance of a quarter-point rate reduction at the Fed's meeting on December 18. Traders are also pricing in approximately 80 basis points of easing by the end of next year, indicating a strong sentiment towards a more accommodative monetary policy.
The labor market data will be crucial for traders to validate their positions on potential rate cuts, reflecting broader economic conditions. The employment figures will provide important insights into the health of the economy and the central bank's future actions as it navigates its monetary policy strategy.