US Bonds Surge as Weak Retail Sales Boost Fed Rate-Cut Bets

Group 1 - Treasury yields surged as investors anticipated multiple interest rate cuts by the Federal Reserve this year, with money markets pricing in around 30% odds for three quarter-point cuts [1][4] - The decline in yields was influenced by a loss of consumer spending momentum and concerns over the labor market, with the benchmark 10-year note's yield falling to 4.13%, the lowest since January 15 [2][3] - Retail sales data showed flat growth in December, with eight out of thirteen categories experiencing declines, raising concerns about economic performance ahead of the delayed January employment report [7] Group 2 - Shorter-maturity yields declined less ahead of a $58 billion auction of three-year notes, which saw solid demand and a record share awarded to direct bidders [5] - The session included significant block trades in five- and 10-year Treasury futures, indicating strong demand as sellers took profits on long positions established earlier in January [6]