Key Developments:
U.S. Treasury yields fell on Monday as investors focused on a slew of upcoming economic data and growing expectations for faster monetary policy easing by the Federal Reserve this year.
Trump’s Tax and Spending Cut Bill Progress
President Donald Trump’s tax and spending cut bill made slight progress over the weekend with a procedural vote to begin debate on the proposed legislation. However, bond market reactions have remained moderate so far.
Investor Focus on Upcoming Economic Data
Fixed income investors are concentrating on a busy schedule of economic data this week, with the non-farm payroll report on Thursday taking center stage.
- Economists, according to a Reuters survey, anticipate 110,000 new jobs in June, down from May’s 139,000.
- The unemployment rate is expected to rise to 4.3% from May’s 4.2%.
Yield Declines and Recent Trends
The 10-year Treasury yield dropped 4.9 basis points (bp) to 2.334%, reaching its lowest level since early May. The benchmark yield increased by 43 bp in June and 74 bp in the second quarter, marking its highest rise since the quarter ending in December.
The 30-year Treasury yield fell 5.5 bp to 4.792%. Over the quarter, the 30-year yield rose nearly 17 bp, its highest level since December.
Key Questions and Answers
- Q: What is the main focus for investors at this time? A: Investors are closely watching a series of upcoming economic data releases, particularly the non-farm payroll report on Thursday.
- Q: How has President Trump’s tax and spending cut bill affected the bond market? A: The bill has made slight progress, but so far, bond market reactions have been moderate.
- Q: What are economists predicting for the upcoming jobs report? A: Economists expect 110,000 new jobs in June and an increase in the unemployment rate to 4.3%.
- Q: How have U.S. Treasury yields changed recently? A: Yields have declined, with the 10-year Treasury yield dropping to its lowest level since early May and the 30-year yield falling by nearly 17 bp over the quarter.
