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U.S. Treasury yields were relatively flat on Tuesday as markets digested rising geopolitical developments in Venezuela and weak U.S. economic data as attention shifted to Friday’s December jobs report.
of 10 year treasury Yields increased by less than 1 basis point to 4.165%. Two-year bonds edged up less than 1 basis point to 3.459%.
One basis point equals 0.01%, and yield and price are inversely related.
Investors remain focused on developments in Venezuela after the United States attacked the country over the weekend and detained President Nicolás Maduro and his wife, Cilia Flores, who appeared in a New York courtroom on Monday.
At a press conference on Saturday, President Donald Trump said the United States would “manage” Venezuela “until there is a safe, proper and wise transition of power.”
Deutsche Bank said in its daily report on Tuesday that global stock and bond markets were “on track” with geopolitical developments, and the MSCI All Country World Index, which measures global stock market performance, rose less than 1%.
Meanwhile, economic indicators showed further weakness in US manufacturing. The ISM index in December fell to 47.9%, lower than expected.
“Taken together, the weak headlines, continued decline in employment, and stabilizing price pressures suggest further Fed easing this year,” Emirates NBD said in a note.
The focus later this week will be on jobs data, with economists expecting 54,000 new jobs to be added in December.
“The jobs report will ultimately determine whether the next move in the market is bullish or bearish,” said Ian Lingen, head of U.S. rates strategy for BMO Capital Markets’ fixed income strategy team.
