Investors scrutinize U.S. Treasury yields amid economic data evaluation

Manufacturing Growth Dampens Federal Reserve Rate Cut Expectations in US Treasury Market

On Tuesday, the 10-year Treasury note yield increased, following gains from the previous session as traders reconsidered the possibility of the Federal Reserve cutting rates in June. The benchmark rate climbed almost 7 basis points to 4.397%, reaching its highest level in two weeks and close to the peak levels of the year. Meanwhile, the 2-year Treasury note yield rose nearly 1 basis point to 4.726%. Yields and prices move in opposite directions, with one basis point equivalent to 0.01%.

The unexpected growth in U.S. manufacturing was seen as reducing the likelihood of significant Fed rate cuts, according to Dutch bank ING. News that manufacturing in the U.S. expanded for the first time in 17 months, as data released by the Institute for Supply Management on Monday showed an increase in the ISM manufacturing index to 50.3, up from 47.8 in February and surpassing the 48.1 Dow Jones consensus estimate. A reading above 50 indicates growth, with the index measuring the percentage of companies reporting expansion versus contraction.

The odds of a rate cut in June based on fed futures trading fell to around 58.8%, down from about 70% a week earlier, as investors remained cautious about the possibility of rate cuts in the future due to this new data on US manufacturing growth . The unexpected growth was seen as reducing

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