US bond traders wait for Non-Farm Payrolls report to react to bets on Fed rate cuts.

Bond and currency traders are preparing for the release of the US employment report on Friday, expecting the data to consolidate investors' views on the Federal Reserve policy and determine short-term interest rate trends. Weaker than expected economic data this week has reinforced market bets on a dovish stance by the Federal Reserve, pulling back the 30-year Treasury bond yield from the edge of 5% and pushing short-term Treasury yields higher. The US dollar has remained strong against most currencies in recent days, but has fallen about 8% since the beginning of the year. A 25 basis point rate cut by the Federal Reserve at the meeting on September 16-17 seems increasingly likely, and investors will focus on the data released on Friday to understand how the central bank will implement monetary policy in the coming months. With the recent widespread expectation of a slowing economic growth in the coming weeks, stronger-than-expected data could catch the market off guard and prove that the recent shift to bearish sentiment by some investors was correct.