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Treasury yields rose Monday, taking back some of the ground lost after a bout of buying interest Friday sparked by a weaker-than-expected December jobs report.
What are Treasurys doing?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.87% rose 1.6 basis points to 1.84%, while the 2-year Treasury yield TMUBMUSD02Y, +0.00% was up 1.2 basis points to 1.576%. The yield on the 30-year Treasury bond TMUBMUSD30Y, +0.97% gained 1.7 basis points to 2.301%. Yields rise as Treasury prices fall.
What’s driving the market?
The market was whipsawed last week as investors digested the rise and then ebbing of U.S.-Iran tensions, with yields ending the week with a decline after the December jobs report showed the U.S. economy created a weaker-than-expected 145,000 jobs and a subdued reading on wage growth.
What are analysts saying?
“So far in 2020, market volatility has been very low, so we suspect that the economic data released would have to be extreme in order to get the market moving out of the range that has so far proven difficult to break,” said Thomas Simons, senior money market economist at Jefferies, in a note.
“The first opportunity will be on Tuesday with the release of the [consumer-price index] and gasoline prices could push the [year-over-year] measure north of 2.5% and spark some long-end selling,” he wrote. “That being said, there is a risk that disappointing retail sales on Thursday could whip the market right back to lower yields.”
Read: Happy New Year! The U.S. economy enters 2020 ‘with a little more zip’
Economists surveyed by MarketWatch forecast a 0.3% rise in the CPI, while the core reading, which strips out volatile food and energy prices, is expected to show an increase of 0.2%.
Related: Should stock-market investors start worrying about inflation?
What’s on the economic calendar?
On Monday, Boston Federal Reserve Bank President Eric Rosengren is set to deliver a speech in Hartford, Connecticut, at 10 a.m. Eastern, while Atlanta Fed President Raphael Bostic is scheduled to speak at a Rotary Club of Atlanta event at 12:40 p.m. Eastern. Neither Rosengren nor Bostic are voting members of the Fed’s rate-setting panel this year.
“Given big consensus on Fed policy this year (unchanged), we don’t expect them to deliver market-moving comments. We nevertheless keep a close eye on any statements on (upside) inflation (risks),” wrote analysts at KBC Bank in Brussels, in a Monday note.
December data on the federal budget are due at 2 p.m. Eastern.
