Treasury yields in focus as investors await inflation data
US Treasury yields edged higher on Tuesday as investors await closely watched inflation figures later in the week.
The yield on the benchmark 10-year Treasury rose nearly 2 basis points to 2.7809% at 4:50 a.m. ET, while the yield on the 30-year Treasury again crossed the threshold of 3% to trade around 3.0057%. Yields move inversely to prices and one basis point is equal to 0.01%.
The 2-year Treasury yield was slightly lower at 3.2159%, continuing to trade well above the longer-term 10-year rate. This relationship is widely observed on Wall Street as a potential indicator of recession.
Investors are trying to gauge the potential pace of the Federal Reserve’s monetary policy tightening efforts. A surprisingly robust US jobs report last week appeared to reduce the likelihood of a recession, allowing the central bank to proceed with more aggressive rate hikes as it seeks to contain inflation.
Wednesday’s consumer price index for July should offer some clarity on the path of interest rate hikes.
This data release is preceded by a fresh batch of economic data on Tuesday.
A survey of small business owners by the National Federation of Independent Businesses for July will be released at 6 a.m. ET.
Preliminary second quarter productivity numbers and unit labor costs are both expected to be released at 8:30 a.m. ET.
The US Treasury will auction $34 billion in 52-week bills and $42 billion in 3-year bills on Tuesday.
– CNBC’s Elliot Smith contributed to this report.