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U.S. Treasury yields slipped Tuesday as the bond-market showed signs of settling down following strong 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,
slid 6.2 basis points to 1.656%, nearly a two-week low. The 2-year note
TMUBMUSD02Y,
was down 1.3 basis points to 0.159%, while the 30-year bond yield
TMUBMUSD30Y,
fell 4.4 basis points to 2.317%. Bond prices move inversely to yields.
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 saw some minor U.S. economic data on Tuesday. The number of job openings jumped to 7.37 million in February, its highest in over two years, from 7.1 million in January, the Labor Department said Tuesday.
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?
The rally on Tuesday “more likely represented a pause in the collective bearish ambitions as what ‘should’ have driven 10-year yields another 5-10 basis points higher ultimately resolved in a grind toward lower yields,” said Ian Lyngen, head of U.S. rates strategy, noting the lack of a bearish reaction from recent economic data.
