Treasuries fell for a second day, pulled lower by a selloff the UK bond market, as traders shifted their attention to a report on the US jobs market on Thursday. 

Yields rose across most maturities with 30-year Treasuries climbing seven basis points to a session high of 4.83% in morning trading in New York. The market was, in part, following moves in the UK, where yields on 30-year gilts jumped on concerns about Chancellor of the Exchequer Rachel Reeves’ future reignited concerns about the nation’s fiscal position.

READ MORE: Loan Think The Fed chose Treasury markets over housing sanity

“The UK long end is getting crushed and that market is thin so it’s taking all long duration higher in yield,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. 

The market briefly pared losses earlier in the session after a report on private-sector payrolls showed an unexpected slump in June, a sign of weakness in the US labor market. 

Yields for two-year notes, which are more sensitive to monetary policy, erased an increase of nearly three basis points, to trade little changed following the release of ADP figures showing a drop of 33,000 in payrolls last month. 

READ MORE: Mortgage rates slide after FOMC meeting, Iran attack

Investors are turning to Thursday’s jobs report, the third and most comprehensive to be released this week on US labor market conditions. If that data shows further weakness, traders reckon that the Fed could move up cuts. Following the ADP report, traders added to wagers on at least two cuts this year, with the first coming in September. 

A “general softening trend among many labor market indicators is really the story,” said Angelo Manolatos, a rates strategist at Wells Fargo. “That softening likely puts the Fed in a position to cut rates later this year, likely starting in September.”

The prospect of Fed cuts propelled the Treasury market in June to its best monthly performance since February. Yields dropped last week to their lowest level in more than a month. And open interest data shows traders added new long positions into the recent bond market rally.

“If there’s a material increase in the unemployment rate it will change the calculus in the market’s mind about the timing and pace of rate cuts,” said Dominic Konstam, head of macro strategy at Mizuho Securities USA. 

Investors are also contending with President Donald Trump’s sweeping budget bill, which was narrowly passed in a Senate vote Tuesday and carries implications for the deficit. The House plans to vote on the bill Wednesday as Republicans rush to complete work on the legislation by a July 4 deadline set by the president.