NEW YORK — U.S. Treasury yields dipped
from nearly 3-week highs on Tuesday following economic data that
showed slowing wage growth and a cooling housing market.
The Employment Cost Index rose 1% in the fourth quarter,
down from a peak of 1.4% in the first quarter of 2022, while
wages and salaries grew 1% compared to 1.3% in the previous
quarter, according to the U.S. Bureau of Labor Statistics.
Home prices, meanwhile, rose 6.8% in November compared with
the same time last year, and slowed from the 8.7% gain in
October, according the S&P CoreLogic Case-Shiller Home Price
composite index of 20 metropolitan areas.
Rising wages and housing costs have been chief concerns of
the Federal Reserve in its battle with inflation. The central
bank is widely expected to raise benchmark interest rates by 25
basis points to a range of 4.50% and 4.75% at the conclusion of
its policy meeting on Wednesday.
“All eyes are on the Fed this week and the Street’s
expectations for a 25 basis point rate hike. Investors will
keenly listen to Chairman Powell’s comments for any indication
of the Fed wavering from its aggressively hawkish stance,” said
Craig Johnson, chief market technician at Piper Sandler.
The yield on 10-year Treasury notes was down 5.3
basis points to 3.498%. The yield on the 30-year Treasury bond
was down 3 basis points to 3.630%.
A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at -70.3 basis points.
The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down 6.2
basis points at 4.199%.
January 31 Tuesday 9:08AM New York / 1408 GMT
Price Current Net
Yield % Change
Three-month bills 4.585 4.7038 0.043
Six-month bills 4.66 4.8387 -0.010
Two-year note 99-221/256 4.197 -0.064
Three-year note 99-238/256 3.8999 -0.068
Five-year note 99-128/256 3.6102 -0.073
Seven-year note 99-162/256 3.5597 -0.067
10-year note 105-48/256 3.4939 -0.057
20-year bond 103-120/256 3.7498 -0.041
30-year bond 106-200/256 3.6256 -0.034
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 28.00 0.25
U.S. 3-year dollar swap 14.00 -0.50
U.S. 5-year dollar swap 5.50 -0.50
U.S. 10-year dollar swap -2.00 0.25
U.S. 30-year dollar swap -38.25 -0.50
(Reporting by David Randall;
Editing by Bernadette Baum)