On Tuesday, U.S. Treasury yields remained relatively steady as investors assessed the latest economic data and its potential implications for the economy. At 3:19 a.m. ET, the 10-year Treasury yield was slightly down at 4.3943%, while the 2-year Treasury yield stood at 4.8162% after a minor decrease. Yields move inversely to prices, with one basis point representing a 0.01% change.
Market reactions were mixed on Tuesday, with the 10-year Treasury yield dropping nearly 12 basis points following reports of a contraction in the manufacturing sector. The ISM manufacturing index for May came in at 48.7, below expectations of 49.6, signaling a contraction in the industry. Investors await the ISM services index release for further sector insights, along with the upcoming May jobs report showcasing labor market data.
Additional economic indicators, such as job openings and factory orders data, are expected to be released on Tuesday. The Federal Reserve’s upcoming meeting is also on investors’ radars, with expectations for unchanged interest rates but keen attention to policymakers’ commentary on monetary policy and the economic outlook. The Fed is currently in a communication blackout phase prior to the meeting, restricting official remarks. Despite indications of slowing inflation, officials are awaiting more data before adjusting monetary policy.
Meanwhile, the European Central Bank is anticipated to announce its first interest rate cut since 2019 this week, reflecting global economic concerns and central bank response strategies.