U.S. Treasury yields were nearly flat on Monday as market participants awaited key jobs data due later in the week and kept a close eye on a temporary halt in hostilities between the United States and Iran.
The benchmark 10-year Treasury yield edged up by less than one basis point to 4.378%, while the 2-year Treasury yield climbed almost 2 basis points to 4.107%. Meanwhile, the 30-year bond yield held steady at 4.866% at the market close. One basis point equals 0.01%, and when yields rise, bond prices fall, and vice versa.
Market participants are closely watching employment figures due during this week, which is shortened by the Independence Day holiday. The bond market will close on Friday, July 3, in observance of Independence Day. On Tuesday morning, the May JOLTS report - which measures the number of available job openings in the U.S. - is scheduled for release.
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Thursday brings the June nonfarm payrolls report, detailing how many jobs the U.S. economy added last month. Investors will scrutinize both reports for clues about the overall health of the economy.
These employment figures are especially important because they influence the Federal Reserve's interest rate decisions. Strong job growth could push the Fed to keep rates higher for longer, which tends to lift bond yields. Conversely, a weakening labor market might fuel expectations of rate cuts, putting downward pressure on yields. With inflation still above the Fed's target, every data point is being weighed carefully.
The Fed has repeatedly emphasized that its policy moves depend on incoming data, making these reports crucial for gauging whether the economy is cooling enough to warrant lower rates or remains too hot to ease. A surprise in either direction could trigger a significant move in bond markets, as traders adjust their expectations for the central bank's next steps. The JOLTS data will also provide insight into labor demand, which has remained resilient despite higher borrowing costs.
On the geopolitical front, a temporary halt in hostilities was reached between the United States and Iran, permitting commercial ships to navigate the Strait of Hormuz without interference. The agreement followed military clashes over the weekend that had risked derailing ongoing negotiations to end the broader conflict.
"Technical talks are slated to continue on all areas of the MOU," a U.S. government spokesperson told CNBC on Sunday. "Both sides will stand down for now, and vessels can move freely."
The fragile ceasefire helped push oil prices higher. West Texas Intermediate futures advanced 2.2%, settling at $70.75 per barrel, while international Brent crude rose 1.61% to close at $73.15 per barrel.
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