Treasury yields rise to start the 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 notes from the Federal Reserve’s September meeting.

The benchmark 10-year Treasury up about 2 basis points to 5.296%. The 30-year Treasury bond was also 3 basis points higher at 5.661%. The yield on the 2-year Treasury fell 1 basis point to 4.814%.

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

The 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 minutes from the central bank’s September meeting, which are slated to come 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.