Treasurys sold off on Monday, pushing yields higher for the second time in three sessions, as investors weighed Federal Reserve Chairman Jerome Powell’s recent efforts to damp rate-cut expectations.What happened
The yield on the 2-year Treasury note
BX:TMUBMUSD02Y
jumped 9.1 basis points to 4.656% from Friday’s 4.565% level.
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose 6.1 basis points to 4.286% from 4.225% Friday afternoon.
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
rose 2 basis points to 4.437% from 4.417% late Friday.
What drove markets Investors are awaiting November’s nonfarm payroll data, being released on Friday, to see if labor-market developments back up the case for the U.S. central bank to start lowering interest rates next year. Last Friday, Powell pushed back against expectations for a 2024 rate cut and a manufacturing survey from the Institute for Supply Management showed a continued contraction in activity during November.
For all of last month, 10- and 30-year yields had their steepest monthly declines since August 2019, driven by hopes that easing inflation will open the door to Fed rate cuts.What strategists are saying “Macroeconomic data out last week reinforced the view that the U.S. economy is headed towards a soft landing, with inflation falling towards the Fed’s target even as a full-employment economy continues to boom on the strength of domestic demand,” said Matthew Ryan, head of market strategy at global financial services firm Ebury.
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The yield on the 2-year Treasury note
BX:TMUBMUSD02Y
jumped 9.1 basis points to 4.656% from Friday’s 4.565% level.
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose 6.1 basis points to 4.286% from 4.225% Friday afternoon.
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
rose 2 basis points to 4.437% from 4.417% late Friday.
What drove markets Investors are awaiting November’s nonfarm payroll data, being released on Friday, to see if labor-market developments back up the case for the U.S. central bank to start lowering interest rates next year. Last Friday, Powell pushed back against expectations for a 2024 rate cut and a manufacturing survey from the Institute for Supply Management showed a continued contraction in activity during November.
For all of last month, 10- and 30-year yields had their steepest monthly declines since August 2019, driven by hopes that easing inflation will open the door to Fed rate cuts.What strategists are saying “Macroeconomic data out last week reinforced the view that the U.S. economy is headed towards a soft landing, with inflation falling towards the Fed’s target even as a full-employment economy continues to boom on the strength of domestic demand,” said Matthew Ryan, head of market strategy at global financial services firm Ebury.
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