U.S. Jobs Data Weaken; U.S. Treasuries Rise on Fed Rate-Cut Outlook, EUR/USD and BTC Fall

U.S. Treasuries rose on February 5, 2026, as revised employment data showed climbing corporate layoff announcements and an unexpected increase in initial claims for unemployment benefits, reinforcing expectations for the Federal Reserve to begin rate cuts this year. Short-dated Treasuries led the gains, while U.S. stock and bitcoin futures fell as investors shifted to Treasuries for safety. Data through the end of January showed initial claims for unemployment benefits higher than expected, continuing a pattern that extended to a 2009-level spike in Challenger, Gray & Christmas’ January layoff announcements. Gregory Faranello of AmeriVet Securities said yields have room to decline amid weakening labor market data. The February 5 nonfarm payroll report, originally scheduled for Friday, was moved to February 11, 2026, and the CPI to February 13, 2026, due to a temporary government shutdown. Short-term Treasuries implied a higher probability of a Fed rate cut before July 2026, with Jerome Powell’s successor expected to take office. Win Thin of Bahamian Bank noted if labor market weakness continues, the Fed may act sooner than priced. Separately, British government bonds also rose as the Bank of England maintained its policy stance but showed division, with some members favoring a rate cut, driving down two-year yields and supporting global Treasuries. The broader shift reflects heightened risk aversion in response to the weakening U.S. labor outlook.