Treasury yields fractionally higher ahead of key data releases

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U.S. Treasury yields nudged slightly higher on Tuesday morning, as market participants await the release of key economic data points later in the week.

Near 2:25 a.m. ET, the yield on the benchmark 10-year Treasury note was around 1.7 basis points higher at 4.1109% while the yield on the 30-year Treasury bond was up just over 1 basis point at 4.3284%.

Yields move inversely to prices.

Investors are trying to gauge when the Federal Reserve will begin cutting interest rates, which will be a key determinant of the trajectory for markets and the economy this year.

Two significant pieces of economic data are on the slate this week: a preliminary fourth-quarter GDP growth figure is due on Thursday, followed by the Commerce Department’s closely-watched personal consumption expenditures price index for December on Friday.

Despite the uncertain rate outlook, risk-on sentiment remained robust on Monday, as the Dow Jones Industrial Average and the S&P 500 both notched all-time highs.

“It’s an economy proving to be more resilient than many thought and it’s one that is supported by the prospect of central banks cutting rates, and that’s a great environment for bonds and it’s a great environment for risky assets,” PGIM Principal and Global Investment Strategist Guillermo Felices told CNBC’s “Squawk Box Europe” on Tuesday.

Auctions will be held Tuesday for $46 billion of 52-week Treasury Bills and $60 billion of 2-year notes.