Treasury yield rises on manufacturing data

Chuck Mikolajczak

NEW YORK, July 3 (Reuters) – US Treasury yields rose slightly on Monday after economic data showed that the manufacturing sector continues to face headwinds.

* The Institute for Supply Chain Management (ISM) said its manufacturing PMI fell to 46.0 last month, its lowest level since May 2020, from 46.9 in May. The readings marked the eighth consecutive month below the 50 level, which separates contraction from rising activity on a monthly basis, the longest streak since the Great Recession.

* “The manufacturing sector has entered a recession and no respite is in sight. Weak orders are likely to lead to lower production. Even if employment does not fall, incomes will remain at risk,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee. Falls, Wisconsin.

* 10-year Treasury yields fell after the release of the data, but then rose 3.9 basis points to 3.858%.

* The S&P global manufacturing index for June was 46.3, in line with the previous preliminary reading, while construction spending rose 0.9% in May from an estimate of 0.6%.

* The closely watched part of the Treasury yield curve, which measures the difference between 2-year and 10-year yields, considered as an indicator of economic expectations, was -107.9 basis points. Earlier, the spread reached its deepest inversion since 1981.

* The 30-year Treasury yield rose 2.2 basis points to 3.876%. The 2-year bond yield, which tends to move in line with interest rate expectations, rose 5.7 basis points to 4.934%.

(Reporting by Chuck Mikolajczak; Spanish editing by Ricardo Figueroa and Javier Leira)

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