Investors Consider Economic Data and Interest Rate Forecasts

On Thursday, U.S. Treasury yields remained relatively stable as investors considered recent economic data and speculated about potential interest rate cuts. At 6:15 a.m. ET, the yield on the 10-year Treasury was slightly up at 4.293%, while the 2-year Treasury yield was unchanged at 4.734%. Yields move inversely to prices, with one basis point representing 0.01%.

Investors were closely analyzing the latest economic indicators and were awaiting the release of the May jobs report later in the week. This report would provide information on nonfarm payrolls and the unemployment rate, offering valuable insights into the labor market. Recent data from ADP showed that private payrolls had increased by 152,000 in May, falling below the expected 175,000.

Earlier in the week, job openings for April were reported at 8.059 million, the lowest in three years. Additionally, the ISM’s purchasing managers index for the services sector rose to 53.8 in May, exceeding the anticipated 50.7, signaling expansion in the sector.

Looking ahead, investors also anticipated updated import and export figures as well as weekly initial jobless claims data. Meanwhile, the European Central Bank was expected to announce its first interest rate cut since 2019, amidst lingering inflationary pressures in the euro zone. Canada had recently become the first G7 country to reduce interest rates, following earlier cuts by central banks in Sweden and Switzerland.

Although the Federal Reserve was scheduled to meet the following week, interest rate cuts in the U.S. were not anticipated to begin until later in the year. The outlook for the economy and interest rates remained uncertain, with investors closely monitoring global economic trends and central bank actions.