Treasury yields dropped after a reading of job openings dropped below 10 million, in a sign that Federal Reserve rate hikes are finally starting to take their toll on the labor market.
Yields fell across the board, with the benchmark 10-year Treasury note declining about 3 basis points to 3.341%. while The yield on the 2-year Treasury bond fell 13 basis points to 3.85%. Yields move inversely to prices.
Treasurys
Investors digested signs that the labor market may finally be losing steam. Available positions fell to 9.93 million in February, according to a report from the Labor Department on Tuesday. FactSet data had estimated 10.4 million openings.
Meanwhile, traders remain focused on the likely trajectory of monetary policy, as the Federal Reserve continues its efforts to rein in inflation against the backdrop of persistent concerns about economic growth, and following several banking collapses that caused chaos in bond markets over the past month.
The Fed isn't scheduled to meet until early May, but traders are pricing in a 60% chance that the central bank will hike rates by 25 basis points next month, according to the CME Group's FedWatch tool.
To be sure, "this could change quickly and dovishly if April brings more problems in the US banking system," wrote Nicholas Colas, co-founder of DataTrek Research. "It could also wander its way back to being hawkish again if there are no further signs of financial system stress and banks say they are not curtailing lending during their Q1 earnings calls."
Wall Street is also weighing a spike in oil prices that led stock markets higher to start the new trading month on Monday.