Treasury yields mostly flat as final week of 2023 begins

Treasury yields changed little on Tuesday as investors settled in for what is expected to be a quiet final week of trading for 2023.

What yields did

The yield on the 2-year Treasury note
BX:TMUBMUSD02Y
inched up one-tenth of a basis point, to 4.339%, according to FactSet data.
The 10-year Treasury note yield
BX:TMUBMUSD10Y
dipped 2.2 basis points, to 3.885%.
The 30-year Treasury bond yield
BX:TMUBMUSD30Y
fell 1.7 basis points, to 4.042%.

What’s happening

The U.S. market were quiet Tuesday as investors returned from the Christmas holiday. Looking ahead, market analysts expect a calm week with only a couple of notable economic-data releases on the calendar.

The 2-year Treasury yield pulled back slightly after Tuesday afternoon’s auction saw “healthy demand” from investors, noted José Torres, senior economist at Interactive Brokers.

“Optimism concerning Fed rate cuts and robust investor sentiment are fueling much of this appetite,” Torres said in emailed comments. “The longer end, however, remains a bigger wild card over time, with the path toward fiscal restraint remaining narrow.”

What analysts say

Tom Essaye, founder of Sevens Report Research and a former Merrill Lynch trader, said investors will be paying close attention to Thursday’s weekly jobless-claims report, along with a report on U.S. home prices that is due out shortly. Beyond that, Essaye said he expects a quiet week.

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