Treasury yields retreat following downbeat data

Tuesday saw a decline in US Treasury yields as investors anticipated news later this week that would provide more details about the status of the economy. The S&P Global Flash U.S. manufacturing PMI dropped from 51.9 in March to 49.9, a four-month low. A reading less than 50 signifies a downturn in the sector’s economy. This survey supports the idea that markets will be taken off guard by how swiftly the economic indicators start to favour lowering interest rates in the near future.

Other economic data that is scheduled for release later this week may potentially provide insight into the state of the economy and influence the decisions made by Federal Reserve policymakers prior to their meeting on April 30-May 1. This includes the personal consumption expenditures price index for March, which is released on Friday, and the first-quarter GDP data, which is released on Thursday. The Fed’s preferred inflation indicator is also included in this. Investors will be analyzing this week’s statistics to look for signs of whether inflationary pressures are still persistent and the economy is still proving to be resilient.

Ten-year US Treasury bond yields fell to 4.609%, compared to the last daily close, which recorded 4.614%. Yields on government bonds rose to their highest level in Tuesday’s session at 4.656%, compared to the lowest level recorded at 4.571%.