U.S. Treasury yields slipped on Tuesday as investors considered the latest economic data and what it could mean for the economy.
The yield on the 10-year Treasury was down by 6 basis points at 4.334%. The 2-year Treasury yield pulled back 3.5 basis points to 4.78%.
Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.
Employment data from the Labor Department showed 8.059 million vacancies in April, compared to an estimate that called for 8.4 million from Dow Jones, which the lowest level in over three years.
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The fresh reading is fueling investor hope that the labor market is perhaps weak enough to allow the Federal Reserve to cut interest rates. However, further weakening could also fuel worry over an impending recession, Investors are now awaiting the forthcoming jobs report on Friday to better gauge the overall state of the economy.
Yields had fallen on Monday, with the 10-year Treasury yield tumbling close to 12 basis points, after economic data indicated a contraction of the manufacturing sector.
The ISM manufacturing index came in at 48.7 for the month of May, below the expected 49.6 figure. Readings below 50 indicate a contraction.
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On Wednesday, ISM's services index will also be released, giving investors insights into another sector. Also this week, the May jobs report is due, providing fresh data from the labor market, including nonfarm payrolls and the unemployment rate.
The data comes ahead of the Federal Reserve meeting scheduled for next week. Investors are widely expecting the central bank to keep interest rates unchanged then, but will be watching closely for hints about what policymakers are expecting for monetary policy and the economy.
The Fed is now in the so-called blackout period ahead of its meeting, during which officials are limited in what they can discuss publicly. In recent weeks, however, Fed officials have indicated that they are looking for more data to show that inflation is slowing before easing monetary policy.
Elsewhere, the European Central Bank is expected to announce its first interest rate cut since 2019 this week.
— Correction: The 10-year Treasury yield fell nearly 12 basis points Monday. A previous version misstated when the move happened.
