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1556 ET – The Treasury yield curve flattened a bit to start the week as the 10-year Treasury yield fell by about 3 basis points, while the 2-year yield ticked lower by less than 1. Futures-market bets moved further in favor of a December rate cut, with San Francisco Fed President Mary Daly telling The Wall Street Journal in an interview that she favors a cut next month. Daly isn’t a voter this year but her positions are often aligned with those of Fed Chair Powell. A slug of catch-up economic data on retail sales and wholesale prices will help set the tone Tuesday morning. The 10-year yield ends at 4.035%, compared with 4.062% to end last week. The 2-year yield finishes at 3.504%, versus 3.513% Friday. ([email protected]; @mattgrossman)
Treasury Yield Curve Flattens to Start the Week
0904 ET – Treasurys are mixed to start the week, with a decline in the 10-year yield while the two-year yield is ticking higher. In a holiday-shortened trading week, investors will be waiting on catch-up economic data from the federal government and looking ahead to a Fed meeting on December 9-10 that could yet bring another rate cut or a hold. A rally this year has pushed the 10-year yield down closer to 4%, but sustained trading below that level “would require a meaningful shift in the macro landscape and a downshift in the outlook,” Ian Lyngen of BMO writes to clients. This morning it is around 4.055%, down from 4.062% to end last week, while the two-year yield is around 3.526%, versus 3.513% on Friday. ([email protected]; @mattgrossman)
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