Treasury Yields Slide as Tariffs and Jobs Data Loom

15:42 ET - The markets continue to exhibit a cautious sentiment, favoring the security offered by U.S. Treasury bonds as anticipation builds up before President Trump's significant tariffs announcement. At this moment, uncertainty reigns supreme. "Given how unpredictable this situation is, it's challenging to devise a strategy regarding these new tariffs; hence, we suggest waiting and observing," state analysts at LPL Financial. This major tariffs statement is anticipated later today. Prior to that, figures from ADP are projected to show an uptick in private-sector employment last month, rising to approximately 120,000 from July's figure of 77,000, based on estimates gathered by the Wall Street Journal. Weak manufacturing indices have further influenced bond yields downwards. Consequently, the yield on the ten-year treasury has decreased by 0.089 percentage points to stand at 4.156%, marking its lowest level since early December. Similarly, the yield on the two-year treasury fell by 0.048 percentage points to reach 3.863%, which represents its lowest mark since early October. paulo.trevisani@wsj.com ; @ptrevisani)

Treasury Yields Continue Decline Before Tariffs Deadline

08:49 AM ET - Investors continue to seek refuge in U.S. government bonds, driving down Treasury yields following their significant decline in Q1. This move comes as they await Thursday's tariff announcement. Despite President Trump stating his decision on tariffs is finalized, specifics have not been disclosed, causing an overall cautious sentiment among market participants. Today's early economic indicators include several U.S. Purchasing Managers' Indexes which are anticipated to reflect a slowdown in manufacturing activity. Additionally, the Job Openings and Labor Turnover Survey (JOLTS) will release data at 10:00 AM ET, followed by the ADP Employment Report scheduled for tomorrow, leading up to Friday’s March Jobs Report. Currently, the ten-year yield stands at 4.158%, whereas the two-year sits at 3.862%. paulo.trevisani@wsj.com ; @ptrevisani)

Eurozone Bond Yields Drop Before Tariff Statement and Inflation Figures Release

0711 GMT - Yields on Eurozone government bonds are declining as investors shift towards safer assets in anticipation of U.S. President Trump’s upcoming tariff statements scheduled for Wednesday. Additionally, market participants expect decreases in both headline and core inflation rates within the eurozone when these figures are published at 0900 GMT. According to Tradeweb statistics, the yield on the 10-year German Bund has dropped approximately 2.5 basis points to stand at 2.709%. Meanwhile, the yield on France's 10-year OAT bond has similarly decreased by 2.5 basis points to reach 3.426%, following weaker performance relative to German Bunds due to French politician Marine Le Pen being barred from political activities for five years over misuse of EU funds. emese.bartha@wsj.com )

French Government Bonds Suffer Due to Le Pen Aftermath; Additional Slump Might Temporarily Halt

0656 GMT - French government bonds, known as OATs, continued to lag behind their Italian counterparts, the BTPs, following a ruling by a Paris court prohibiting far-right leader Marine Le Pen from participating in the upcoming presidential elections, according to notes from Citi Research’s Aman Bansal and analyst Jamie Searle. They suggest that further underperformance may slow down while discussions about tariffs continue. Le Pen was found guilty of misappropriating European Union funds, resulting in a ban from holding public office over the next half-decade.
"Even though this judgment raises the possibility of increased support for RN [Le Pen's National Front party] in recent opinion polls due to sympathy voting, these developments have minimal impact on markets until an additional legislative election takes place," state Citi's rate strategists. On Monday, the gap between yields on 10-year French OATs and German Bunds expanded to 72.5 basis points before settling back slightly at 71 basis points based on data provided by Tradeweb. emese.bartha@wsj.com )

U.S. Long-Term Treasury Bonds Are No Longer the Perfect Shield

0619 GMT - According to Adam Marden from T. Rowe Price, the extended portion of the U.S. Treasury yield curve can no longer serve as an ideal safeguard against various threats such as elevated inflation rates, potential stagflation, and sluggish economic expansion. Post the global financial crisis, long-term Treasurys effectively acted as a buffer since the Federal Reserve maintained a steady policy stance and deflation concerns did not materialize significantly, notes the fund manager. Currently, however, factors like significant federal budget deficits could lead to unfavorable conditions for these securities; this situation might worsen should another downturn prompt further fiscal outlays. "Unless there's a substantial decline in both growth and inflation back to pre-pandemic and during-the-GFC levels, I do not believe that holding onto long-dated Treasurys will offer much protection now," he states in his report. monica.gupta@wsj.com )

Bond Investors Are Hesitant About the Likelihood of an ECB Interest Rate Reduction in April

0602 GMT — According to Stefan Mellin from Danske Bank Research, money markets are showing decreasing confidence regarding an interest-rate reduction by the European Central Bank during their upcoming April 17th meeting. In a statement, Mellin notes that both substantial fiscal loosening across Europe and potential trade tensions with the US have made the bank more hesitant concerning future monetary policies. "Money markets are undergoing another round of repricing for the ECB," Mellin states. As per LSEG statistics, money markets now anticipate only a 79% likelihood of a rate cut as of Monday, down from previous projections. emese.bartha@wsj.com )

U.S. Treasury yields declined across all maturities, with the long end leading the drop.

0552 GMT – Yields on U.S. Treasuries, which dropped on Monday, continued falling during early trading in Europe, particularly for longer maturities. Caution prevails among investors as they await President Trump’s tariffs announcement scheduled for Wednesday and several crucial economic reports, such as the upcoming employment figures due out on Friday. As per Tradeweb, the two-year Treasury yield has declined by 3 basis points to 3.881%, the five-year yield dipped by 4 basis points to 3.938%, whereas both the ten-year and thirty-year yields have fallen by 5 basis points each, now standing at 4.195% and 4.564% respectively. emese.bartha@wsj.com )