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US Economic Data Will Drive Bond Yields Over Venezuela

ADMIN || 6th January 2026

The macro catalyst for a breakout in Treasury yields is key upcoming economic data rather than geopolitics. That should keep moves in Treasuries contained at least until Friday’s December jobs report.

US yields are at roughly the midrange of a trading band that’s been in place for nearly a month after having taken in news the US ousted Venezuelan President Nicolás Maduro largely in stride. The muted response has a lot to do with the cross-asset reaction.

Importantly, a gauge of emerging markets rose to a record Monday. If it had fallen, bonds would have rallied more with ease on concerns about President Donald Trump’s statesmanship. Likewise, crude oil had a limited response to weekend events, easing inflation concerns that nonetheless bear watching.

Indeed, data took center stage already on Monday, when Treasuries rallied after the ISM manufacturing gauge slipped unexpectedly. That allowed yields on the benchmark 10s to slip about 3.5 bps to ~4.155% after having tested the upper end of a the 4.10% to 4.20% near-term range twice during the session. That’s in part because corporate issuance was heavy out of the gate with about 20 deals coming to fruition, a portion of a possible $70 billion for the week. Normally that amount of supply would send yields sharply higher as corporate treasurers rate lock deals while others free up balance sheet to buy the new issuance creating selling pressure in Treasuries. However, preparations for the supply were initiated late last week, limiting any blow to bonds Monday.

A break of support beyond 4.20% will require more fundamental inputs namely December’s nonfarm payroll and consumer inflation report. Those are due Jan. 9 and 13, respectively.

The median estimate for Dec. nonfarm payrolls is 60,000. There is focus on some of the higher estimates, particularly 155,000 from Jefferies (our own estimate is at 85,000). Details of the ISM Manufacturing report masked improvement in new orders, backlogs and new export orders all reasons that can support growth and employment ahead. That coupled with customer inventories at the lowest since 2022 signals a need to replenish another factor that can put a floor under the jobs market and take yields higher. An upward surprise Friday would provide a pathway for a range break, putting 4.25% back on the radar a yield level tested throughout March to September.

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