Treasury yields move lower as investors look ahead to more delayed data

• Key data releases expected include ADP Employment Change, Empire Manufacturing Index, NAHB Housing Market Index on Tuesday, and delayed November-December housing data plus the Fed's preferred inflation gauge (PCE) on Friday
• FOMC minutes due Wednesday will be scrutinized for insights on the last interest rate decision and future monetary policy direction
• Traders are pricing in a 90% probability that the Federal Reserve will keep interest rates unchanged in the 350-375 basis point range

Summary

U.S. Treasury yields declined on Tuesday as investors prepared for delayed economic data releases during a holiday-shortened trading week. As of 3:34 a.m. ET, the 10-year Treasury yield fell over 3 basis points to 4.02%, while the 30-year bond yield dropped 3 basis points to 4.66%. The 2-year note yield decreased 2 basis points to 3.388%.

Key Market Context:

• The bond market was closed Monday for Presidents' Day
• One basis point equals 0.01%; yields move inversely to prices
• Trading activity remained subdued as markets reopened

Upcoming Data Releases:

Investors are awaiting several critical economic indicators this week, including:

• Tuesday: ADP Employment Change report, February Empire Manufacturing Index, and NAHB Housing Market Index
• Wednesday: FOMC minutes from the last Federal Reserve meeting, plus delayed housing data for November and December
• Friday: December's Personal Consumption Expenditures (PCE) index—the Fed's preferred inflation gauge

Market Implications:

The FOMC minutes will be closely scrutinized for insights into the central bank's latest interest rate decision and future monetary policy direction. Traders are currently pricing in a 90% probability that the Federal Reserve will maintain interest rates unchanged in the 350-375 basis point range at its next meeting.

The muted yield movements reflect investor caution ahead of these data releases, which could influence expectations for Fed policy and provide updated economic signals following the holiday disruption.