U.S. Treasury yields extended their recovery after official economic data showed the Services PMI surpassed market expectations. The strong performance in the services sector highlighted resilient economic activity, helping offset recent concerns surrounding a slowdown in manufacturing output. The rebound in yields was also supported by the U.S. Department of the Treasury's announcement of a bond buyback program. The combination of solid economic data and Treasury operations pushed yields higher across key maturities, strengthening the U.S. Dollar as market expectations shifted regarding the Federal Reserve's future interest rate trajectory. Going forward, traders should monitor incoming economic releases and central bank commentary to assess whether the strength in services can sustain high Treasury yields. Continued economic momentum could reinforce a higher-for-longer rate policy, directly impacting broader currency markets and interest-rate-sensitive assets.
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