Treasury yields rise to start week; traders look ahead to Fed minutes

U.S. Treasury yields rebounded on Monday following their sharp sell-off last week as investors digested new economic data and looked ahead to the upcoming release of the Federal Reserve’s September meeting notes.

The benchmark 10-year Treasury yield was last up about 2 basis points to 5.298%. The yield on the 30-year Treasury bond was 3 basis points higher at 5.659%. The yield on the 2-year Treasury fell nearly 1 basis point to 4.818%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Those moves came as traders took note of new data on growth in the services sector released Monday by the Institute for Supply Management. The ISM report showed that the Purchasing Manager’s Index — a measure of economic activity in the services sector — grew 54.9% in September, or roughly in line with expectations and slightly below its rate of growth for the prior month.

Now, investors are looking ahead to the release of minutes from the central bank’s September meeting, due out on Wednesday.

Investors have grappled with a bond market selloff over the past few weeks, while a lackluster monthly jobs report on Friday helped to bring yields down and alleviated concerns about another rate hike.

Traders are now pricing in a nearly 82% chance of the Fed keeping rates unchanged at its next meeting, according to the CME Group’s FedWatch Tool.