Treasury yields were mostly lower to kick off August trading on Monday, after the rates on 2- and 10-year notes saw their biggest monthly declines since March 2020.
What are yields doing?
- The yield on the 10-year Treasury note BX:TMUBMUSD10Y was at 1.229% versus 1.239% at 3 p.m. Eastern on Friday. Yields for debt fall as prices rise.
- The 30-year Treasury yieldBX:TMUBMUSD30Y was at 1.908%, up from 1.896% Friday afternoon.
- The 2-year Treasury note rateBX:TMUBMUSD02Y was at 0.18%, compared with to 0.188% on Friday.
- Last week, the 10-year Treasury yield fell 4.7 basis points, the 30-year declined 2.9 basis points, and the 2-year was little changed.
- For the month, the 10-year yield fell 20.4 basis points, the 30-year bond yield declined 16.9 basis points, and the 2-year yield declined 5.9 basis points. It was the largest one-month decline in yield for the 2-year and 10-year since March 2020, according to data compiled by Dow Jones Market Data.
What’s driving the market?
Treasurys found a modest bid as stock-index futures pointed to a healthy start for equities. Major U.S. stock averages lost ground last week, but remain not far off all-time highs.
A bipartisan group of senators late Sunday unveiled details of a nearly $1 trillion infrastructure package. A lengthy debate lies ahead for the measure, a priority of President Joe Biden.
In China, data released Saturday by the National Bureau of Statistics showing the country’s official purchasing managers index fell to 50.4 in July from 50.9 in June. Numbers above 50 indicate expansion on the 100-point scale.
Speculation remains around the timing of when the Federal Reerve will lay out a timetable for tapering its program of monthly asset purchases. Fed Gov. Lael Brainard, in a Friday speech, made remarks that suggested she doesn’t expect policy makers to be in position to announce a plan until this fall.
Brainard said the Fed would be better positioned to assess progress by the labor market toward the central bank’s goals in October, when spending, school and work patterns “should settle into a post-pandemic normal,” The Wall Street Journal reported.
IHS Markit purchasing managers index readings for the U.S. are due at 9:45 a.m. Eastern, while the Institute for Supply Management’s July manufacturing index is due at 10 a.m. June data on construction spending is also scheduled for 10 a.m.
The main event on the economic calendar comes Friday, with the release of the July jobs report.
What are analysts saying?
“U.S. payroll data this week will be a key focus for the market, particularly after Fed
Chair Powell seemed to put more focus on the labor market than inflation as the
arbiter of the Fed’s upcoming tapering decision,” said Steve Barrow, head of G-10 strategy at Standard Bank, in a note.