According to Golden Finance, the CME FedWatch tool shows that bets on a 50 basis point rate cut by the Fed next week have increased from 28% yesterday to 43%, with US Treasury yields set to decline for the week. The CPI and PPI data released this week support expectations of a mild PCE reading at the end of this month, leading some investors to anticipate that the Fed will be more concerned about employment issues.

Meanwhile, The Wall Street Journal reports that officials are considering a more aggressive easing of monetary policy, as they believe inflation is under control and are concerned about employment. The 10-year US Treasury yield is trading around 3.657%, while the 2-year US Treasury yield is at 3.598%.