U.S. 5-year and 30-year Treasury yields remained inverted on Tuesday morning, ahead of key employment data releases.
The yield on the 5-year Treasury note rose 3 basis points to 2.6023% at 4:30 a.m. ET, while the yield on the 30-year Treasury bond was up 1 basis point to 2.5862%. The yield on the benchmark 10-year Treasury note was up 2 basis points to 2.4975%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
The 5-year and 30-year rates inverted on Monday morning for the first time since 2006, with more purchases of the longer-dated Treasurys than the shorter-dated government bonds.
This inversion of the yield curve has in the past happened prior to recessions, as more purchases of long-dated Treasurys indicate investor concern about the health of the economy.
However, the main spread that traders watch, between 2-year and 10-year Treasurys, remain positive for now.
Soaring inflation, driven higher by the Russia-Ukraine war, has sparked concerns about a slowdown in economic growth. Officials from Russia and Ukraine are set to resume face-to-face negotiations in Turkey on Tuesday.
Federal Reserve Chairman Jerome Powell said last week that the U.S. central bank could become more aggressive with hiking interest rates in an effort to get inflation under control.
Jobs data is one factor used by the Fed to help determine its monetary policy plans. February’s Job Openings and Labour Turnover Survey is due out at 10 a.m. ET on Tuesday.
The March ADP Employment Change report is then set to be released on Wednesday, followed by weekly jobless claims data on Thursday. The closely watched March nonfarm payrolls report is then due out on Friday, with economists expecting to see 460,000 jobs added in March and the unemployment rate to fall to 3.7%, according to Dow Jones estimates.
On Tuesday, house price data for January is set to come out at 9 a.m. ET. The March CB consumer confidence index is then slated for release at 10 a.m. ET.
An auction is scheduled to be held on Tuesday for $47 billion of 7-year bills.
— CNBC’s Samantha Subin contributed to this market report.
