U.S. Treasury yields moved higher on Tuesday after the latest labor market snapshot, though the 10-year Treasury note remained on track to end what has been a three-month sequence of rising yields. The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) indicated that job openings increased by 9,000, bringing the total to 7.594 million at the end of May. That figure was above the economist consensus of 7.30 million.
Markets reacted to the release with a short-lived extension of gains in yields as investors parsed the labor-market signal. The JOLTS print was the first of several labor-related reports on the calendar this week, with the government's monthly payrolls report scheduled for Thursday.
Yields had been drifting lower in the days leading up to this week amid growing market expectations that inflationary pressures would ease. That downward move was attributed in part to a decline in oil prices, a development that offset market interpretation of a hawkish tone from the Federal Reserve. Policymakers' stance was underscored by a policy address from new Fed Chair Kevin Warsh on June 17, which markets viewed as hawkish.
Beyond the domestic data, developments on the geopolitical front added to market uncertainty. Senior U.S. envoys arrived in Doha but, according to a Qatari official, will not hold a high-level meeting with Iran. That absence of a top-tier meeting raised questions about diplomatic prospects for securing a lasting cessation of hostilities in the Iran war and for fully reopening the Strait of Hormuz, both of which have potential implications for energy markets.
Investors will be watching the rest of the week's labor reports closely, particularly Thursday's payrolls release, for further guidance on the labour market's direction and its implications for inflation and monetary policy. For now, the modest uptick in job openings and the mix of economic and geopolitical signals left yields marginally higher but did not alter the broader narrative that had been in place heading into the week.
Summary
The JOLTS report showed job openings edged up by 9,000 to 7.594 million in May, topping the 7.30 million forecast. U.S. Treasury yields rose following the release, with the 10-year note still positioned to break a three-month streak of increases. Markets are awaiting further labor data, including the government payrolls report due Thursday, while recent oil price declines and a hawkish Fed speech on June 17 have both influenced recent yield movements. Diplomatic developments in Doha - where top U.S. envoys will not meet at a high level with Iran - introduced additional uncertainty regarding the Iran war and access through the Strait of Hormuz.