Bond Market Update

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• The Treasury market saw a rush of buying interest following this morning's ADP Employment Report, which showed a very modest 37,000 increase in private-sector payrolls. That soft number stirred some growth concerns that were exacerbated by the arrival of the ISM Services PMI at 10:00 a.m. ET, which showed only the fourth contractionary reading (49.9%) in the last 60 months.
• The fed funds futures market has bumped up the probability of a rate cut of at least 25 basis points at the July FOMC meeting to 30.1% from 24.4% a day ago. The September FOMC meeting remains the favorite for the next rate cut, with a 77.8% probability of at least a 25-basis point cut versus 70.4% yesterday.
• The greenback has been undercut by the weaker data. The U.S. Dollar Index is down 0.5% to 98.70.
• Separately, President Trump noted in a Truth Social post that he thinks the debt limit should be "entirely scrapped."
• Yield check:
  • 2-yr: -9 bps to 3.87%
  • 3-yr: -9 bps to 3.83%
  • 5-yr: -9 bps to 3.93%
  • 10-yr: -10 bps to 4.36%
  • 30-yr: -10 bps to 4.88%