T-Bill Yields Spike on X-Date With JOLTS in Focus: Markets Wrap

Treasury bill yields for June topped 5% after Janet Yellen warned the Treasury could run out of cash as soon as next month, with traders also awaiting the so-called JOLTS jobs opening data ahead of the Federal Reserve decision.

(Bloomberg) — Treasury bill yields for June topped 5% after Janet Yellen warned the Treasury could run out of cash as soon as next month, with traders also awaiting the so-called JOLTS jobs opening data ahead of the Federal Reserve decision.

“Given June 1 is the official X-date for now, that reinforces our view the Fed will raise 25bp, but pause and further dial back any reference to rate hikes as the near-term central case,” said Dennis DeBusschere founder of 22V Research, referring to the day when the government won’t be able to pay all of its bills.

President Joe Biden invited top congressional leaders for a May 9 meeting on the debt limit as anxiety grows about the US coming closer to a potential default. The White House has said it would not negotiate with Republicans over extending the debt ceiling, while House Speaker Kevin McCarthy has vowed not to extend the limit without corresponding cuts to the federal budget.

Despite the move higher in T-bill yields, the rates on longer-term Treasury securities were down on Tuesday. The S&P 500 dropped for a second day with traders scouring the latest earnings reports.

Corporate Highlights:

  • Morgan Stanley is preparing a fresh round of job cuts amid a renewed focus on expenses as recession fears delay a rebound in dealmaking.
  • Uber Technologies Inc. reported earnings that beat analysts’ estimates, showing that consumers continue to spend more on rides and food takeout.
  • Pfizer Inc.’s profit and revenue outpaced analysts’ expectations as demand for its pandemic products persisted.
  • Marriott International Inc. reported earnings that beat expectations as consumer demand for vacations continued to make up for slower business travel.
  • Tesla Inc. has slightly raised prices of its Model 3 sedan and Model Y sports utility vehicle in the US and China, as the electric vehicle pioneer continues to tweak its pricing policy.

Key events this week:

  • ADP employment, S&P global US services PMI, ISM services, Wednesday
  • Fed Chair Jerome Powell holds news conference following rate decision, Wednesday
  • US initial jobless claims, trade balance, Thursday
  • European Central Bank rate decision, followed by ECB President Christine Lagarde’s news conference, Thursday
  • US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 0.3% as of 9:30 a.m. New York time
  • The Nasdaq 100 was little changed
  • The Dow Jones Industrial Average fell 0.3%
  • The Stoxx Europe 600 fell 0.5%
  • The MSCI World index fell 0.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.2% to $1.0953
  • The British pound fell 0.3% to $1.2457
  • The Japanese yen was little changed at 137.49 per dollar

Cryptocurrencies

  • Bitcoin rose 1.3% to $28,055.88
  • Ether rose 1.2% to $1,830.01

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.55%
  • Germany’s 10-year yield advanced six basis points to 2.37%
  • Britain’s 10-year yield advanced five basis points to 3.77%

Commodities

  • West Texas Intermediate crude fell 1.8% to $74.32 a barrel
  • Gold futures rose 0.2% to $1,995.30 an ounce

This story was produced with the assistance of Bloomberg Automation.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.