US Treasury yields reversed on Monday morning, with investors focused on Federal Reserve policy, ahead of the minutes of the central bank’s latest meeting scheduled for release later in the week.
return on 2-Year Treasury Bond Yield It rose less than a basis point to 2.4384 at 4:25 AM ET, while the index was 10-year treasury bonds It rose one basis point to 2.386%. return on 5-year government bonds Move lower from one basis point higher to 2.5553% and 30 year treasury bonds It jumped by two basis points to 2.4499%. Returns move inversely with prices and one basis point is 0.01%.
Two- and 10-year bond yields, which make up the main part of the yield curve that traders watch, flipped again on Monday. Treasury yields flipped Thursday for the first time since 2019 and did so again on Friday, after the release of closely watched jobs data.
The Bureau of Labor Statistics reported Friday that 431,000 non-farm jobs were added in March, with an unemployment rate of 3.6%. Economists polled by Dow Jones expected 490,000 jobs were added last month, with an unemployment rate of 3.7%.
The reversal in yields after this report indicates investors are concerned that strong economic data may give the Federal Reserve the green light to press ahead with plans to raise interest rates further. There are concerns that these price increases could slow economic growth.
5-year and 30-year Treasury yields also remained inverted, having flipped for the first time since 2006 a week ago.
Inversions in Treasury yields have historically occurred before recessions, although economists have pointed out that it is not a guarantee of economic downturn.
Investor focus this week will be on the minutes of the Federal Reserve’s latest meeting, due out at 2 p.m. ET on Wednesday.
ING strategists said in a note on Monday that they expect the Federal Reserve to announce a 50 basis point interest rate hike at its May, June and July meetings.
“This should continue to drive revenue upwards across the board, but also turn the curve further,” they said.
On Monday, factory orders data for February is due out at 10 a.m. ET.
Investors also continue to monitor developments in the Russo-Ukrainian War. Russia’s chief negotiator Vladimir Medinsky said talks on a draft peace treaty will resume on Monday, stressing that the Kremlin’s position on Crimea and Donbass has not changed.
Ukrainian President Volodymyr Zelensky accused Russian forces of genocide, saying that the Ukrainian people were “being destroyed and exterminated.”
Auctions are scheduled for Monday for $57 billion for 13-week bills and $48 billion for 26-week bills.
– CNBC’s Jesse Pound and Sam Meredith contributed to this market report.
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