Employment data

Traders are shifting their focus to Friday's release of the consumer price index, the first real glimpse on the state of the economy since the start of the US government shutdown.

While the shutdown has delayed the release of federally-compiled statistics, economists at Citigroup Inc. and Goldman Sachs Group said state-level data suggested initial jobless claims increased last week.

But even if global financial crisis 2.0 doesn't come, investors may well be in for a rough ride in the coming months as frothy financial markets come to terms with a cyclical slowdown.

The yield on US 10-year debt edged two basis point higher to 4.04% after falling to a five-month low Thursday, but still remained on course for a fourth week of declines.

In SOFR options, which closely track the Fed's policy path, a number of large positions have emerged that look to benefit from an outsized cut of 50 basis points at next week's meeting.

The attention will now turn to reports on producer prices and consumer prices, due Wednesday and Thursday, for signals of how quickly the Federal Reserve will lower borrowing costs.

Traders were watching a slew of data on a bigger-than-expected increased in jobless claims and expanded manufacturing Thursday.

Oneok plans to sell three-part, dollar-denominated senior unsecured notes while BMW is looking to price dollar-denominated debt in a four-tranche offering.

Interest-rate swaps showed traders now see a roughly 70% chance of a quarter-point rate cut by September. Fewer than two rate cuts are fully priced in for the year.

The labor market continues to cool gradually, a sign that businesses facing heightened uncertainty and turmoil didn't significantly alter their hiring plans.