On Monday, Treasury yields exhibited moderate weakness, continuing the downward trend observed over the past two sessions. Despite an early dip, bond prices managed to recover some ground, though they stayed in negative territory. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, edged up by 1.7 basis points, reaching 4.437 percent.
This rise marked the third consecutive session of gains for the ten-year yield, further distancing it from the one-month closing low recorded last Wednesday.
The persistent weakness in Treasuries could be attributed to ongoing uncertainty regarding future interest rates, particularly as some Federal Reserve officials have cautioned that the central bank might still need to raise rates if inflation remains elevated.
While the probability of lower rates by September remains significant, it has decreased to 76.3 percent from nearly 90 percent last week, as per the CME Group's FedWatch Tool.
Trading volume remained relatively low, largely due to the absence of significant U.S. economic data, which kept some traders on the sidelines.
The week’s economic calendar appears relatively sparse, but reports on durable goods orders and housing market activity (both new and existing home sales) could garner attention, along with the minutes from the latest Federal Reserve meeting.
With another quiet day ahead in terms of U.S. economic data, Tuesday’s trading may be influenced by reactions to remarks from several Fed officials.
