US Treasury yields fall as uncertainty over 2023 outlook persists

US Treasury yields fall as uncertainty over 2023 outlook persists, investors eye key data release

Government bond yields fell on Tuesday as uncertainty about the outlook for the new year continued and investor attention turned to the release of new economic data due this week.

At 5:27 am ET, the 10-year Treasury note yield was down 9 basis points to 3.741%. The 2-year Treasury bond fell 5 basis points to trade at 4.349%.

Yield and price move in opposite directions. One basis point equals 0.01%.

As trading year 2023 begins, investors are eyeing key economic data due out this week that could provide clues about the state of the US economy and policy plans from the Federal Reserve.

The final reading of the S&P Global Manufacturing Purchasing Managers’ Index for December is scheduled for Tuesday. Preliminary data released in December suggested factory activity fell during the month.

On Wednesday, investors are hoping for insights into the labor market through JOLTS data on job offers. Also pending are the minutes of the Fed’s December meeting, which investors will be scouring for clues on future monetary policy.

Many investors are hoping for signs that the central bank will slow or halt rate hikes this year. In 2022, the Fed implemented four consecutive 75 basis point hikes before slightly slowing the pace of rate hikes in December with a 50 basis point hike to fight inflation.

This raised concerns among many traders about a looming recession. Uncertainty about this and whether inflationary pressures will abate has weighed on investor sentiment in recent weeks.