U.S. Treasury Yields Ease; Focus Shifts to Fed Meeting

Wall Street Journal

7 days ago

0541 GMT – U.S. Treasury yields edge lower in Asian afternoon trade as markets await the Federal Reserve's policy decision on Wednesday, even as keeping interest rates on hold is widely expected. Yields decline slightly more on the long end of the U.S. Treasury curve. The two-year yield falls 0.6 basis point to 3.915%; while the 10- and 30-year yields fall 1.6 basis points to 4.402% and 4.948%, respectively, according to Tradeweb. Markets price in 44 basis points of rate cuts for this year, according to LSEG. 'Although we retain our outlook for no rate cuts in 2025, the economy can evolve differently than we expect,' Morgan Stanley Research analysts say in a note. ([e-mail])
0554 GMT – The recovery in German Bunds has scope to extend as the data calendar remains light before Wednesday's macro data avalanche, says Commerzbank Research's Erik Liem in a note. 'Bunds experience a benign start into the week,' the rates strategist says. Beneath the surface, however, they remain vulnerable, underscoring that supply prospects remain on top of investors' minds, he says. While Tuesday is light on data, on Wednesday flash estimate national and eurozone GDP data for the second quarter will be watched. On Monday, the 10-year German Bund yield closed at 2.688%, down 3.5 basis points, according to Tradeweb. ([e-mail])