The yield on the 10-year U.S. Treasury reached a new 14-month high as investors awaited key inflation reports. It rose slightly to 4.776%, marking the highest level since November 1, 2023. This followed a sharp increase on Friday, driven by a stronger-than-expected jobs report. Meanwhile, the 2-year Treasury yield edged up by 1 basis point to 4.407%.
(Note: One basis point equals 0.01%. Yields and prices move inversely.)
Globally, bond yields are on the rise, with traders expecting a slower pace of interest rate cuts this year. This sentiment is fueled by expectations that the Federal Reserve will proceed cautiously amid indications of economic resilience and uncertainty linked to President-elect Donald Trump’s policies.
Friday's labour market data showed nonfarm payrolls increasing by 256,000 in December, surpassing November’s 212,000 and the forecast of 155,000 jobs.
Investor focus now shifts to inflation metrics, with the producer price index (PPI) report scheduled for release on Tuesday, followed by the consumer price index (CPI) on Wednesday.