U.S. Treasury yields were little changed early on Tuesday, as investors digested jobs data and comments from Federal Reserve officials, while awaiting key inflation readings later this week.
The yield on the benchmark 10-year Treasury note was little changed at 1.324% by 8:03 a.m. ET, while the yield on the 30-year Treasury bond hovered near the flatline at 1.962%. Yields move inversely to prices.
Yields rose on Monday after job openings jumped to a record high 10.1 million in June as hiring also increased, according to the latest figures from the Labor Department. Supply shortages have weighed on the labor market recovery even as the broader economy rebounds.
“Concerns over a slowing pace of economic improvement dragged on Treasury yields in recent weeks, but weakening expectations create the opportunity for positive data surprises and rising yields,” Bill Merz, director of fixed income at U.S. Bank Wealth Management, said in a note. “Higher-than-expected inflation or hints of more persistent inflation could pressure yields higher.”
The Federal Reserve considers employment data, among other economic data like inflation readings, to determine when it will start tightening monetary policy.
The consumer price index and the producer price index, both of which measure inflation, are scheduled to come out Wednesday and Thursday, respectively.
On Monday, two Fed officials indicated that the pace of the U.S. recovery and elevated inflation could prompt discussion about the central bank starting interest rate hikes.
Meanwhile, the U.S. Senate is slated to vote Tuesday on the $1 trillion bipartisan infrastructure bill, a key priority for President Joe Biden, before beginning a fresh debate on a $3.5 billion expansion of social programs.
On the data front, second-quarter preliminary labor costs and nonfarm productivity readings are due at 8:30 a.m. ET.
Treasury auctions will be held for $34 billion of 52-week bills and $58 billion of 3-year notes.
– CNBC’s Vicky McKeever and Tanaya Macheel contributed to this report.
