Treasury debt sales dominate light data week for bond traders

Core Viewpoint - Bond traders are focusing on the demand for new Treasury notes and bonds amid a record US government shutdown, with the market operating without official data [1] Group 1: Market Demand and Treasury Auctions - The Treasury will auction new three-, 10-, and 30-year debt, with this week's refunding totaling $125 billion, the same amount as in May last year [2] - Longer-dated yields have recently bounced from lows, with the 10-year yield trading between 4.05% to 4.16% [1][2] Group 2: Interest Rate Expectations - Interest-rate swap contracts indicate a leaning towards a third quarter-point reduction in rates during the Federal Reserve meeting on December 9-10 [2] - The market anticipates rate cuts to around the 3% level over the next 12 months, with sentiment suggesting weaker hiring trends [2] Group 3: Investment Strategy - Capital Group's portfolio manager suggests that the pricing of interest rates is roughly fair, with risks tilted to the downside due to labor market uncertainties [3] - The firm favors owning intermediate and shorter maturity Treasuries (2-year to 5-year) that are more closely linked to the path for Fed funds [3]