5-year and 30-year Treasury yields remain inverse, focusing on jobs data

5-year and 30-year Treasury yields remain inverse, focusing on jobs data

U.S. 5-year and 30-year Treasury earnings remained upside down Tuesday morning, ahead of the release of key employment data.

Income on 5-year Treasury notes 7:00 am. At ET, it rose 4 basis points to 2.609%, while yields on 30-year Treasury bonds rose 2.579%, less than 1 basis point. Earnings on the benchmark 10-year Treasury note increased by 2 basis points to 2.497%. The yield goes in the opposite direction of the prices and 1 base point is equal to 0.01%.

For the first time since 2006, 5-year and 30-year rates reversed on Monday morning, with more purchases of long-term treasuries than short-dated government securities.

This reversal in the yield curve has occurred in the past before the recession, as more purchases of long-dated treasuries indicate investor concerns about the health of the economy.

However, between the 2-year and 10-year treasuries, the main spread seen by traders is currently positive.

Rising inflation caused by the Russia-Ukraine war has raised concerns about slowing economic growth. Russian and Ukrainian officials are set to resume face-to-face talks in Turkey on Tuesday.

Federal Reserve Chairman Jerome Powell said last week that the US Federal Reserve could be more aggressive in raising interest rates in an effort to control inflation.

Jobs data is one of the factors used by the Fed to help determine its monetary policy. The February job openings and labor turnover survey will take place on Tuesday at 10 a.m. ET.

The March ADP Employment Change report will then be published on Wednesday, followed by weekly unemployment claims statistics on Thursday. Dow Jones estimates that a report on nonfarm payrolls in March will be released on Friday, adding that 460,000 jobs will be created in March and that the unemployment rate will fall to 3.7%.

Home price data for Tuesday, January will arrive at 9 a.m. ET. The March CB Consumer Confidence Index will be released at 10 a.m. ET.

The 47 billion 7-year bill will be auctioned on Tuesday.

Sneha Mali

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