U.S. Treasury yields slipped early Tuesday as the bond-market settles following good economic data from the services sector and the labor market in the past few days.
What are Treasurys doing?
The 10-year Treasury note
TMUBMUSD10Y,
1.688%
was at 1.694%, down 2.4 basis points from the previous session. The 2-year note
TMUBMUSD02Y,
0.168%
was steady at 0.176%, while the 30-year bond yield
TMUBMUSD30Y,
2.346%
slid 2.4 basis points to 2.337%.
What’s driving Treasurys?
Treasurys continued to stabilize after investors digested a stronger-than-expected March jobs report and an over-20-year-high for a gauge of services sector activity. The solid data suggested segments of the U.S. economy battered by the pandemic were recovering swiftly as the pace of COVID-19 inoculations sped up.
Yet for many traders, much of the swell of good news had been reflected in the rise in long-term government bond yields, leaving them to seek out the next catalyst for another surge in yields.
Investors will see some minor U.S. economic data on Tuesday. The Labor Department will release its Job Openings and Labor Turnover Survey for March at 10 a.m. ET.
Analysts say one market-moving event could come from the minutes from the Federal Reserve’s March meeting, due on Wednesday.
As Fed interest rate-hike bets in the market heat up, investors will look to gain more clarity on how central bank officials are envisioning the economic outlook and timing for liftoff.
What did market participants say?
“Rates have withstood a blast of good U.S. economic data and solid equity gains in quiet bond trading so far this week. Unfortunately, it’s too quiet to draw any early conclusions where rates are headed during the several weeks. For the moment, yields are high enough to keep buyers engaged but low enough to hold off potential price rallies,” said Jim Vogel, an interest-rate strategist at FHN Financial.
