The yield on the 10-year Treasury note fell to 1.53% after the trade deficit data

The yield on the 10-year Treasury note fell to 1.53% after the trade deficit data

Treasury yields fell on Tuesday after data showed the U.S. trade deficit narrowed slightly from record levels due to reduced demand for imports during the COVID-era.

The yield on the benchmark 10-year Treasury note fell about 4 basis points to 1.531%, while the yield on the 30-year Treasury note fell by a similar amount to 2.211%. Yields are inversely proportional to prices.

The goods and services deficit was $68.9 billion in April, down $6.1 billion from $75 billion in March and the highest level in a data series dating back to January 1992. The U.S. Census Bureau and the Bureau of Economic Analysis said on Tuesday.

In addition, the Labor Department reported on Tuesday that job postings in April totaled 9.3 million, a new high and more than 1 million more than expected.

Investor focus is on new inflation signals later this week following Friday’s jobs report. The U.S. added fewer jobs than expected in May, but the unemployment rate dropped to 5.8% from 6.1% and markets reacted positively.

Auctions for 3-year Treasury notes and 42-day bills are due Tuesday.

Damon Harrison
Market Analyst, IPG Group