U.S. Treasury yields fell Tuesday as investors parsed fresh manufacturing data and awaited further insight into the state of the economy from reports due out later in the week.
The yield on the 10-year Treasury was down 2.1 basis points to 4.602%. The yield on the 2-year Treasury was last at 4.927% after falling 4.4 basis points.
Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
The S&P Global Flash U.S. manufacturing PMI came in at 49.9, hitting a four-month low and down from 51.9 in March. A reading below 50 indicates an economic contraction within the sector.
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"All told, then, S&P's survey reinforces the case for thinking markets will be caught out by how quickly the economic data swing to supporting the case for reducing interest rates soon," said Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics.
Further economic data due throughout the week could also indicate how the economy is faring and may inform Federal Reserve policymakers' thinking ahead of their meeting on April 30-May 1.
That includes the Fed's preferred inflation measure, the personal consumption expenditures price index for March, on Friday, as well as a reading of the gross domestic product in the first quarter, which comes Thursday.
Money Report
Investors will be assessing this week's data for clues about whether the economy is continuing to prove resilient and whether inflationary pressures remain sticky. If this is the case, the figures could add to concerns about interest rates remaining higher for longer and there being fewer rate cuts than expected this year or even none at all.
Economists surveyed by Dow Jones expect that the economy grew at a 2.4% annualized pace in the first quarter. On inflation, the expectation is that the all-items PCE index, the so-called core reading that policymakers use as a better gauge of long-run trends, rose 2.6% from a year ago, or 2.7% when excluding food and energy.
Fed policymakers have in recent weeks suggested that there is no rush to cut interest rates and have repeatedly said that rate cuts would begin only when they are confident that the economy is easing.
