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As the new year kicks off and 2023 trading begins, investors’ fingers are crossed on key economic metrics expected to be available in the coming week.
Investors are worried about the 2023 outlook and looking forward to new economic data releases due this week, causing treasury yields to fall. It happened at about 4:19 a.m. ET on the 3rd of January, with the 10-year Treasury note dropping more than seven basis points to 3.7577%. Also, the 2-year Treasury went down almost four basis points and traded at about 4.3637% earlier.
Gloomy 2023 Affects Treasury Yields
As the new year kicks off and 2023 trading begins, investors’ fingers are crossed on key economic metrics expected to be available in the coming week. The key economic data could give indicators on the state US economy and Federal Reserve policy plans. While there was preliminary data of December’s S&P Global Manufacturing Purchasing Managers’ Index published last month, the final ready is due today. The initial publication suggested a shrinking in factory activity through December.
Moreso, investors are looking forward to gaining insights into the labor markets via JOLTS job openings data. The JOLTS job openings is a survey by the US Bureau of Labor Statistics to measure job vacancies. The summary from the Fed’s December meeting is also due, and investors are hoping to get some clues on future monetary policy from it.
Furthermore, many believe that the Federal Reserve may slow down on its continuously increasing interest rates. There were four consecutive 75 basis point increases in increase rates last year before it slightly dropped in December. In December, the central bank announced a 50 basis point hike in interest rates as the fight against inflation lingers. As the Feds passed another interest rate hike as 2022 was about to come to an end, it sent some fears among investors who were hoping for good news in 2023.
A few hours into 2023, US treasury yields rose as investors anticipated a better market in 2023. The 10-year Treasury yields jumped about 2 basis points to 3.8520% on the 30th of December, while the 2-year Treasury increased over 2 basis points to 4.4009% around 5:00 a.m. ET. The last-minute performance was in line with earlier suggestions that the Treasury yield could pop before the new year. At the time of the prediction, the 10-year Treasury yield was up by one basis point to 3.6856%.