bond yields fell for a second session wednesday as the new year sees worries about an economic downturn trump central bank rate rise concerns the benchmark 10year treasury yield has shed nearly 20 basis points in the first two trading days of the year with investors buying government bonds on signs of slowing inflation in europe and worries about an economic contraction the international monetary fund said over the weekend that it expects recession to hit a third of the world’s economy in 2023 investors will have a large batch of us data to consume in the next few sessions and this may help illustrate how successful the federal reserve’s sharp monetary policy tightening in 2022 has been in damping activity a trend it believes is necessary to tackle high inflation on wednesday the december ism manufacturing index will be published alongside job opening figures for november both due at 10 am eastern then at 2 pm the fed will release the minutes of its december policy meeting the next day sees the adp employment report initial jobless claims and a survey of the services sector while friday will deliver another services index and the always eagerly anticipated nonfarm payrolls report several fed officials also will be making comments markets are pricing in a 703 probability that the fed will raise interest rates by another 25 basis points to a range of 450 to 475 after its meeting on february 1st according to the cme fedwatch tool the central bank is expected to take its fed funds rate target to 495 by june 2023 according to 30day fed funds futures what are analysts saying “us treasury yields fell sharply on tuesday all along the curve but fell the most at the longer end of the curve with the 10year yield benchmark down almost 15 basis points to 373 some of the move was in sympathy with european yields which dropped on a much softer than expected german cpi print” wrote strategists at saxo in a morning bulletin “the 10year us treasury yield level to watch to the upside is perhaps the 400 area ahead of the 434 high from october which is a 15year high to the downside the cycle lows below 350 intraday cycle low was 340 are the focus with the first major test of the us treasury market up this friday on the release of us jobs data and the december ism services index and next week on the december cpi report on thursday january 12” saxo added