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  • The US 10-year Treasury yield has dropped to three-week lows.  
  • The US ADP Employment and ISM Manufacturing numbers have bolstered fears of US recession.  

US Treasury yields are feeling the pull of gravity, as investors are piling into safe-haven assets on heightened US recession risk.  

As of writing, the yield on the benchmark 10-year yield is seen at 1.59%, having hit a low of 1.578% a few minutes before press time. That was the lowest level since Sept. 9.  

The yields fell by three basis points and four basis points on Tuesday and Wednesday, respectively.  
Wednesday’s drop could be associated with the US ADP Employment for August, which came in slightly weaker-than-expected figure of 135K.  Also, the decision by the US to impose tariffs on $7.5 billion in  European imports beginning Oct. 18 strengthened the haven demand for Treasuries.

Meanwhile, Tuesday’s drop was fueled by the ISM Manufacturing’s drop to decade lows in September.  

Looking forward, the US yields may continue to lose ground on trade tensions, fears of US recession and dovish Federal Reserve expectations.  It is worth noting that the odds of Federal Reserve cutting rates in October have risen sharply from 40% to 64% this week.