US Treasury yields were mixed on Monday, November 2, as investors prepared for a busy week of economic data, major corporate earnings and the US midterm elections. Investors are closely watching these developments to understand the direction of the US economy and financial markets.
Other Treasury yields also recorded mixed movements. Shorter-term Treasury yields also moved higher. Treasury yields and bond prices move in opposite directions. This means bond prices generally rise when yields fall and decline when yields increase. Oil prices fell sharply as markets reacted to developments in the US-Iran conflict and hopes of a possible diplomatic solution. Oil prices and Treasury yields have generally moved together this year. When oil prices increased, bond yields also tended to rise. However, this relationship weakened in October as investors shifted their attention towards artificial intelligence (AI) and major technology companies.
The 10-year Treasury yield slipped slightly by 1 basis point to 4.914% in early trading on Monday. The 30-year Treasury yield also declined by around 2 basis points to 5.284%. The 2-year Treasury yield moved in the opposite direction, rising by 1 basis point to 4.589% in early trading. The latest figures showed the 10-year yield at 4.921%, down 0.008 percentage points, while the 30-year yield stood at 5.286%, down 0.023 percentage points. The 1-month Treasury yield stood at 3.992%, rising by 0.016 percentage points. The 1-year yield increased by 0.054 percentage points to 4.408%, while the 2-year yield climbed by 0.017 percentage points to 4.598%. The 3-month yield rose by 0.033 percentage points to 4.113%, while the 6-month yield increased by 0.036 percentage points to 4.29%, according to CNBC. One basis point is equal to 0.01 percentage points.
This showed that shorter-term and longer-term US government bond yields were moving differently at the start of the week, according to CNBC. US Secretary of State Marco Rubio said President Donald Trump wanted to resolve the conflict with Iran through diplomatic efforts. His comments came as investors monitored the possibility of reduced tensions between the two countries, according to CNBC.
Oil prices were another major factor investors were watching on Monday.
The November 3 US midterm elections will be another major event for financial markets. Technology stocks will remain in focus after last week’s market sell-off. US employment data will be another major focus this week. Investors will track several reports to understand the condition of the American labour market and whether businesses are hiring or reducing jobs. ADP employment figures for Wednesday will provide another update on the US jobs market. Investors will watch the figures for signs of changes in private-sector employment. Thursday will bring productivity figures and weekly jobless claims. These reports will help investors understand worker productivity and the number of Americans filing for unemployment benefits. Friday’s October nonfarm payrolls report will be one of the biggest economic releases of the week. The report will provide an update on job creation across the US economy, excluding certain categories such as farm workers. The announcement will cover the planned sale sizes for government notes and bonds . Investors will monitor the details to understand the government’s borrowing plans and the supply of Treasury securities in the market. The election results could influence future government spending plans and priorities. Investors will watch whether the outcome changes the direction of Congress’s spending decisions and creates uncertainty around economic policies. With jobs data, corporate earnings and the midterm elections all lined up this week, investors will be watching several factors that could influence Treasury yields and the wider US financial markets.
Investors moved towards safer assets such as government bonds amid concerns about the stock market, according to CNBC. The report will provide information about the number of job openings in the US and help investors assess demand for workers, according to CNBC. Investors will watch the figures for further signs of strength or weakness in the labour market, according to CNBC. Investors will closely follow the results to understand how the balance of power in Congress could change, according to CNBC.
US Treasury bonds received support on Friday after a sharp fall in the stock market, led mainly by technology shares. The week will begin with the Job Openings and Labor Turnover Survey (JOLTS) for September on Tuesday. The US Treasury will also announce its planned auction sizes on Wednesday.
Investors are also preparing for earnings from Apple and Qualcomm. The upcoming results from the two major technology companies are expected to keep attention on the health of the technology sector and the performance of Big Tech stocks .
