Treasury Yields Edge Higher as Markets Weigh Venezuela Tensions and Weak U.S. Data

U.S. Treasury yields moved modestly higher on Tuesday as markets assessed geopolitical developments in Venezuela alongside softer U.S. economic data. The 10-year Treasury yield rose by just over one basis point to 4.179%, while the 2-year yield edged up slightly to 3.461%, reflecting cautious positioning ahead of key labor market data.

Investor focus remains on Venezuela after U.S. strikes over the weekend led to the capture of former president Nicolás Maduro and his wife, Cilia Flores, who appeared in court in New York. Donald Trump said the U.S. would oversee the country “until such time as we can do a safe, proper and judicious transition,” adding to geopolitical uncertainty.

Despite the developments, global markets showed limited reaction. Deutsche Bank noted that equity and bond markets largely took the news in stride, with the MSCI All Country World Index rising less than 1%.

On the economic front, U.S. manufacturing data disappointed. The ISM manufacturing index slipped to 47.9 in December, missing expectations and remaining in contraction territory. Analysts at Emirates NBD said the combination of weak activity, soft employment trends, and easing price pressures points toward potential Federal Reserve easing later this year.

Markets are now looking to Friday’s U.S. jobs report, with economists forecasting 54,000 new jobs added in December. Ian Lyngen said employment data will likely determine the market’s next directional move, underscoring its importance for both bond yields and broader risk sentiment.