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US Treasury yields have faced difficulties in sustaining their upward momentum since the opening bell on Wall Street on Monday. This is largely due to the growing expectation that the Federal Reserve will cut interest rates next Wednesday. Such a move would typically push yields on these sovereign securities downward.
The yield on the 10-year Treasury note rose a few basis points on Monday to 4.405%, compared to Friday’s closing of 4.396%. The yield on these bonds reached a high of 4.415% and a low of 4.365% during the session.
Additionally, negative economic data has highlighted a slowdown in US economic activity, particularly in the manufacturing sector, according to readings from the Institute for Supply Management (ISM).
The New York manufacturing index fell to 0.2 points, a decline of 31 points, significantly below market expectations of 10 points. Similarly, the ISM manufacturing PMI declined to 48.3 points, down 1.4 points, and below market forecasts of 49.5 points. However, the ISM services PMI remained in expansionary territory, indicating continued growth in the services sector.
This suggests that while the manufacturing sector is facing challenges, the broader economy, particularly the services sector, is still relatively resilient.
However, it’s important to note that the overall economic outlook remains uncertain, and future developments could impact Treasury yields and market sentiment.
