US 10Y TREASURY: Macro drives yield bounce

The U.S. 10-year Treasury yields were traded higher on Friday, moving back to 4,53% level. Market participants focused on labor-market indicators throughout the week, seeking clues about the future path of Federal Reserve policy. While softer economic data initially supported expectations for rate cuts, stronger-than-expected payroll figures released later reinforced the view that the Fed may keep interest rates elevated for longer, limiting the decline in yields and supporting the U.S. dollar.
The lowest weekly level was at 4,42%, however, macro data and investor expectations pushed yields back to higher grounds. The week ahead brings few important macro data like Inflation rate in May, Producers Price Index in May and the University of Michigan Consumer Sentiment preliminary for June on Friday. It implies that higher volatility might continue on the US Treasury market. There is some probability for relaxation of yields back to 4,5%. However, if data continue to further support current investors sentiment, then there might also be some probability for even 4,6% level. At this point there is a lower probability for such a move.