On Tuesday (4:00 AM Eastern Time), the US Treasury yields showed a divergent trend as investors digested US President Donald Trump's announcement of a 30-day tariff suspension, while also focusing on the upcoming economic data.
According to the latest data, the 10-year Treasury yield rose 2 basis points to 4.5692%, while the 2-year Treasury yield slightly declined, less than 1 basis point, to 4.2573%. The market is still watching the latest developments in the US economy and whether the Trump administration's trade policy will further affect market sentiment.
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ToggleTrump pauses tariffs on Mexico, market sentiment slightly eases
Trump recently signed an executive order to impose a 25% tariff on imports from Mexico and Canada, and a 10% tariff on imports from China. This move had a far-reaching impact, as the annual trade volume between the US and these three countries is about $1.6 trillion.
However, the market saw a brief respite on Monday as Trump announced that the tariff policy on Mexico and Canada will be suspended for 30 days, provided that the two countries take measures to prevent the inflow of Fentanyl (an opioid drug) into the US. This decision has slightly eased market sentiment, and investors are now re-evaluating future trade risks.
(Trump pauses punitive tariffs on Mexico for one month, Bitcoin rebounds to 99K)
China announces retaliatory measures, imposes up to 15% tariffs on US imports
In response to Trump's tariff decision, China has also quickly taken countermeasures, announcing that it will impose up to 15% retaliatory tariffs on certain US imports. This move has exacerbated market concerns about China-US trade relations, which may affect future bilateral trade and further impact the global supply chain.
Market focuses on upcoming employment and factory order data
In addition to trade policy, investors are also paying attention to the upcoming US economic data, including the December Job Openings and Labor Turnover Survey (JOLTS), which will show the total number of job openings on the last business day of the month. Furthermore, the US December factory orders data will also be released on Tuesday, providing further clues about the health of the economy.
Fed officials deliver speeches, market focuses on non-farm payroll report
Investors will also be watching the latest comments from US Federal Reserve (Fed) officials. Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly will deliver speeches on Tuesday, and the market expects their remarks may reveal the Fed's latest views on inflation and interest rate policy.
Additionally, the focus of investors remains on the January non-farm payroll report to be released on Friday, which will provide the latest update on the US labor market and could influence the Fed's next policy decisions.
Market future trend remains uncertain, investors act cautiously
Overall, the trend of US Treasury yields reflects the market's uncertainty about trade policy, economic data, and Fed decisions. Although Trump has temporarily suspended some tariffs, China's retaliatory measures may plunge the market back into tension. Investors will closely monitor future data and policy developments to assess the economic outlook and adjust their investment strategies accordingly.
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