Traders work on the floor of the New York Stock Exchange.
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U.S. Treasury yields fell on Tuesday as bond markets took a breather ahead of more economic data later this week.
The 10-year Treasury yield, a key measure of mortgage, auto loan and credit card debt, last fell more than 2 basis points to 4.526%. The yield on the two-year Treasury note, which is typically influenced by the Federal Reserve’s short-term interest rate decisions, fell by more than 3 basis points to 4.126%.
Meanwhile, the yield on long-term 30-year government bonds, which tend to respond primarily to geopolitical risks, fell more than 2 basis points to 5.003%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Bond markets took a breather after Monday’s trading, with Treasury yields rising as investors digested another better-than-expected employment situation.
Traders were scrutinizing the latest information on existing U.S. home sales from the National Association of Realtors ahead of the latest inflation numbers released by the Bureau of Labor Statistics later this week.
Existing home sales in May increased by 3.2% from April to an annual rate of 4.17 million units, a recovery that exceeded expectations. Mortgage interest rates fell slightly in April, helping to boost demand.
Traders also digested April statistics that showed the goods and services imbalance was $55.9 billion. That represented a $700 billion decline from March and was lower than the $56.1 billion that economists surveyed by Dow Jones had expected.
“The good news is that the trade situation is moving toward a better balance at the beginning of the second quarter, with import growth subdued while exports were surprisingly strong due to the impact of tariffs,” said Chris Rupkey, chief economist at FWDBONDS. “The bad news is that export growth is uncertain, as much of it appears to be due to higher energy prices due to the Iran conflict.”
“Although it is a modest contribution, trade could boost real GDP growth in the second quarter,” he added.
