US yields off highs, keep daily gains

Yields in the US money markets have retreated from daily highs on Tuesday, albeit they still keep the positive ground against a backdrop of a broad-based USD-weakness.

In fact, US yields are reverting the negative start of the week following auspicious results from the key US ISM Manufacturing during October and managing quite well to keep the trade at shouting distance from last week’s multi-month tops.

The best performers are located in the shorter-end of the curve, with the 2-year benchmark hovering over 0.86% and the 3-year benchmark up around 2% to 1.016% at the time of writing.

Furthermore, and based on Fed Funds future prices, CME Group’s FedWatch tool is now pointing to a probability of more than 70% of a rate hike by the Fed at the December meeting.