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Stock index futures pointed to a lower opening Tuesday after another week of gains.
S&P futures (SPX) -0.4%, Dow futures (INDU) -0.3% and Nasdaq 100 futures (NDX:IND) -0.7% were lower.
The 10-year Treasury yield (US10Y) fell 3 basis points to 3.79%. The 2-year yield (US2Y) fell 3 basis points to 4.73%.
“Yield curves are already consistent with the new hawkish message from central banks, so any rise in yields is more likely to come from economic data,” ING said. “Yields may well continue rising, to 4% for 10Y Treasuries, but this is set to come with a more inverted curve.”
“Of course one might simply disagree that current market rates accurately reflect the data. One such example is the very inverted state of the US yield curve when one compares 10Y Treasury yields, below 4%, to policy rates, above 5%. Inversion can persist if the market’s conviction is high that rates will be cut aggressively in the future.”
Housing starts and permit figures for May arrive before the bell. Starts are expected to dip very slightly to an annual rate of 1.4M. Building permits are seen rising to 1.425M.
“The housing market is not in the early stages of recovery; the downturn merely is morphing from a collapse in demand, sales, and construction, to falling prices and housing-related consumption spending,” Pantheon Macro’s Ian Shepherdson said.
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