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Treasury yields were mixed early Monday as investors looked ahead to this week’s economic data, including retail sales figures.
What yields are doing
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.924%
fell to 2.927%, down from 2.932% at 3 p.m. Eastern on Friday. Yields and debt prices move opposite each other. -
The 2-year Treasury note yield
TMUBMUSD02Y,
2.598%
was at 2.599%, little changed from 2.597% Friday afternoon. -
The 30-year Treasury bond yield
TMUBMUSD30Y,
3.095%
was flat at 3.091%.
What’s driving the market
Yields retreated last week in volatile trading for stocks, bonds and cryptocurrencies. Some analysts have argue that yields may have peaked, at least for now, after a brutal selloff in 2022 that took the 10-year rate to a 3 1/2-year high above 3.2% in intraday trade early last week.
Others see the pullback as a mere respite. While inflation may have technically peaked, it continues to run near its hottest in more than 40 years — and the Federal Reserve appears intent on moving aggressively to contain rate pressures, analysts said.
Meanwhile, investors will be watching data this week to gauge the underlying strength of the consumer, with April retail sales figures due Tuesday morning. Ahead of that, the New York Fed’s Empire State manufacturing index for May was due at 8:30 a.m. Eastern.
What analysts say
The earliest that “US 10yr yields have peaked in the cycle, relative to Fed Funds, was four months in 2000 (January peak at 6.8%, May Fed Funds peak at 6.5%),” said Kit Juckes, strategist at Societe Generale, in a note. “The past is only moderately useful when we try and figure out what the future brings, but I’d be surprised if we have seen the peak in U.S. yields; more likely, equities will find a base and as dip-buyers emerge, and we’ll get another sell-off in Treasuries.”
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