U.S. Treasury yields were lower on the first trading day of the new year, as investors considered what could lie ahead for markets in the coming months.
At 3:50 a.m. ET on Thursday, the yield on the 10-year Treasury was down by three points to 4.5469%. The 2-year Treasury yield was last at 4.2271% after falling by over two basis points.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Treasurys
Bond markets re-opened Thursday after closing early Tuesday and remaining shut Wednesday in observance of New Year’s Day. Treasurys had a choppy 2024, with the yield on the 10-year Treasury starting the year below 3.9%, before rising above 4.7% in the spring, retreating back to below 3.7% in the fall, and ending the year above 4.5%.
The holiday-shortened week is light on the economic data front, but investors nonetheless are watching out for clues about what could lie ahead for the economy, monetary policy and markets in the coming months.
Weekly initial jobless claims figures are due Thursday, which will give fresh hints about the state of the labor market, while Friday will bring insights into the manufacturing sector. Attention will then turn to a series of jobs data and the minutes from the Federal Reserve’s latest meeting which are slated for next week.
In December the Fed indicated that fewer interest rate cuts were now on the horizon. Policymakers will meet again at the end of January, and are expected to hold rates steady according to CME Group’s FedWatch tool.