On Tuesday, the U.S. Treasury yields remained stable as investors analyzed the latest economic data to gauge its impact on the economy. At 3:19 a.m. ET, the 10-year Treasury yield saw a slight decrease to 4.3943%, while the 2-year Treasury yield also dipped slightly to 4.8162%. Yields and prices have an inverse relationship, and a basis point represents 0.01%.
The drop in yields on Tuesday was driven by news of a contraction in the manufacturing sector, as indicated by the ISM manufacturing index falling to 48.7 in May, below the anticipated 49.6. Readings below 50 point to a contraction in the sector. This week, investors are also awaiting the release of the ISM’s services index and the May jobs report, which includes data on nonfarm payrolls and the unemployment rate.
Upcoming data releases are crucial as they precede the Federal Reserve meeting scheduled for next week. While it is widely anticipated that the central bank will maintain interest rates, investors will carefully watch for any indications about the future course of monetary policy and the economic outlook. The Fed is currently observing a blackout period before the meeting, restricting officials from public discussions.
In Europe, central banks are closely monitoring economic challenges caused by COVID-19 and other factors
