A critical test is approaching! Traders who focus more on macro or micro aspects must be prepared in these two weeks.

After experiencing the worst sell-off in six months, the U.S. bond market is now entering a two-week key period that could determine its trend for the rest of the year.

A series of events that could impact the market are imminent, starting with the Treasury Department's announcement of bond issuance scale on Wednesday, followed by the non-farm data to be released on Friday, which will show whether the economy is cooling down enough to justify further rate cuts.

Next Thursday, the Federal Reserve will also announce its interest rate decision, which is the first meeting since the Fed began easing monetary policy in September.

Bain Bernstein Private Wealth Management Chief Investment Officer Alex Chaloff said, "The risks in the coming weeks are indeed very high."

In the past month, due to the continued strength of the economy, the market has doubted the extent of the Fed's rate cuts in the coming months, leading to a significant decline in U.S. Treasury bond prices. It may push up U.S. Treasury bond yields, as people expect his tax cuts and tariff policies to fuel inflationary pressures and keep interest rates high.

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Although the Fed entered the easing cycle last month with a 50 basis point rate cut, traders have abandoned their previous forecasts that the Fed would continue to cut rates rapidly. This has led to a significant jump in U.S. Treasury bond yields, raising borrowing costs across various markets and pushing U.S. Treasury bonds towards their first monthly decline since April.

BNY Wealth Chief Investment Officer Sinead Colton Grant said, "So far, this is an extraordinary cycle - a lot could happen in the next two weeks."

This series of key events is increasing the risk that market selling activities may intensify in the coming weeks. One sign of this is that traders have paid the highest premium this year for options to protect their portfolios from a surge in U.S. Treasury bond yields.

However, some upcoming events may also support the bond market. It is expected that the Treasury Department will announce to maintain the stability of bond auction scale in the next quarter, avoiding any supply pressure, but traders will also closely monitor any signals about the future trajectory.It is anticipated that the Federal Reserve's preferred inflation indicator, the PCE price index, will show some easing of price pressures, while the number of job vacancies is expected to decrease.

According to economists' forecasts, they predict that the non-farm data to be released on Friday will show that the United States added 110,000 jobs in October, as recent hurricanes and the Boeing strike may have distorted the data. Chaloff said, "Any number close to 180,000 is a magic number," and he believes that employment figures below this number will indicate that the economy is weak enough to support further interest rate cuts by the Federal Reserve. If the data is strong, the Federal Reserve will "have to seriously consider the next move."

Institutions have pointed out that traders, whether focusing more on macro or micro aspects, need to be prepared this week. From Tuesday to Thursday, five out of the seven giants in the U.S. stock market will release their financial reports, and Eli Lilly will also announce its performance, meaning that six of the top ten companies in the S&P 500 index will release financial reports that could affect the global market. Coupled with Friday's PCE data and non-farm data, this will be a series of factors that could trigger fluctuations.

However, with the Federal Reserve entering the "silent period," the Fed itself will not provide much guidance on the U.S. economy. The swap market estimates that the probability of the Federal Reserve cutting interest rates by 25 basis points on November 7th is over 80%. But they also indicate that it is quite possible for the Federal Reserve to keep interest rates unchanged at one of the next two meetings.