Treasury yields fell on Tuesday as uncertainty about the outlook for the new year lingered and investor attention turned to fresh economic data releases due this week.
The yield on the 10-year Treasury note was down by 6.2 basis points to 3.769%. The 2-year Treasury yield slid 1.2 basis points to 4.391%.
Yield and price move in opposite directions. One basis point is equivalent to 0.01%.
Treasurys
As the 2023 trading year kicks off, investors are looking ahead to key economic data due to be published this week that could provide clues about the state of the U.S. economy and Federal Reserve policy plans.
The final reading of December's S&P Global Manufacturing Purchasing Managers' Index showed that production contracted during the month at the fastest rate since May 2020. Bond yields moved higher on the news, and stocks fell, erasing earlier gains.
On Wednesday, investors are hoping to gain insights into the labor market through JOLTS job openings data. Minutes from the Fed's December meeting are also due, which investors will be scanning for hints about future monetary policy.
Many investors are hoping for signs that the central bank will slow, or completely pause, interest rate hikes this year. In 2022, the Fed implemented four consecutive 75 basis point increases, before slightly decreasing the pace of rate hikes in December with a 50 basis point hike in its fight against inflation.
That raised concerns about a looming recession among many traders. Uncertainty about this, as well as whether inflationary pressures are easing, has weighed on investor sentiment in recent weeks.