Government bond yields focus on economic data

US government bond yields rose on Tuesday as investors expected a new batch of economic data to be released on the first trading day of the week.

The yield on the reference 10-year treasury bond was almost 3 basis points higher at 3.269%, while the yield on 30-year treasury bonds was trading 4.5 basis points higher at 3.339%. Profitability is moving back in price.

Markets in the United States were closed on Monday for the June 10 holiday.

Tuesday’s trading session comes after a volatile week in which major central banks signaled more aggressive efforts to curb rising inflation.

The Federal Reserve on Wednesday raised its key fund interest rate by 75 basis points, the biggest increase since 1994, with annual inflation in the United States reaching a 40-year high of 8.6 percent in May.

The Swiss National Bank then surprised markets with its first rate hike in 15 years on Thursday, while the Bank of England applied its fifth consecutive increase.

The Fed “will continue to raise interest rates until inflation falls unless one of three things happens,” wrote Joe Kalisch, chief global macro-strategist at Ned Davis Research.

“First is the liquidity and functioning of the financial markets,” he said. “The continuing rising levels and the inability of companies to use capital markets would give the Fed a red light.

“Next are the financial conditions that signal a recession. These include blowing credit spreads and recessionary bear markets for stocks. Credit spreads are still giving the Fed a green light while stocks are flashing yellow,” Kalisz added. “The latter is rising unemployment. Although the labor market is still assessed as narrow, fewer vacancies and rising unemployment applications could soon turn that into yellow.

As for the data, the study on non-productive activities of the Federal Reserve of Philadelphia for June will be published around 8:30 am ET, and the existing sales of housing for May will follow a little later in the session.

– Samantha Subin and Elliott Smith of CNBC contributed to this report.