FX.co ★ US 10-Year Yield Halts Slide

The yield on the 10-year US Treasury note climbed back above 4.45% on Tuesday, reversing a decline that had taken it to a three-week low last week, as the latest economic data supported a more restrictive Federal Reserve policy stance. The JOLTS report showed job openings far exceeding expectations and reaching their highest level in more than a year in April, reinforcing the picture of a robust labor market already reflected in persistently low jobless claims. In addition, manufacturing activity in May came in stronger than forecast according to the ISM PMI, while prices continued to rise. Rate futures indicated that part of the market is still positioned for a Fed rate hike this year, even though the new FOMC Chair, Kevin Warsh, had previously argued for lower rates. This hawkish outlook for the central bank persisted despite oil prices remaining below their recent peaks, as the ongoing standoff between Iran and the United States continued to delay expectations of restored energy supplies from the region.