From Investing.com: 2024-06-30 09:00:36

Upcoming economic reports and Congressional testimony from Federal Reserve Chairman Jerome Powell could shake U.S. government bonds out of a narrow trading range. Benchmark U.S. 10-year Treasury yields have been hovering between 4.20% and 4.35% since mid-June. The 10-year yield stood at 4.33% on Friday. Market is waiting for U.S. employment data and Powell’s testimony for direction.

Latest economic numbers failed to clarify how deeply the Fed will cut interest rates this year, keeping Treasury yields range-bound. U.S. monthly inflation as measured by the personal consumption expenditures (PCE) price index was unchanged in May. Futures linked to the fed funds rate show traders pricing in just under 50 basis points of rate cuts for the year.

Market reactions to employment data next Friday may be affected by low liquidity with many U.S. bond traders on vacation for July 4th. BofA Global Research survey shows fund managers most underweight on bonds since November 2022. Some believe yields could fall further if weakening data supports more rate cuts and increased fixed income allocations.

Consumer price data scheduled for July 11, with Powell set to give semi-annual monetary policy testimony on July 9 and 10. Some investors are skeptical of further Treasury yield declines due to stubborn inflation. Investors believe the U.S. economy is poised for a rebound, limiting downside for bond yields. Central banks worldwide struggle to control inflation.



Read more at Investing.com: Jobs, inflation data may break the US Treasury market out of narrow range By Reuters