• “Labor tidings are very important to both rate direction and Fed intentions,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. “Fed pricing is very flat until the September meeting,” and he added, that “seems fair, but if we begin to see cracks on the employment front bond markets will react.”

Bond investors are looking to a slew of labor-market indicators — including the May employment report — for help in determining the next shifts in Treasury yields and the Federal Reserve’s interest-rate policy. US Treasuries capped their first monthly decline in 2025 in May, according to a Bloomberg index, with sentiment for longer-
dated bonds rattled by worries around the nation’s fiscal outlook. Traders now enter June betting on two quarter-point rate reductions this year, down from around three in early May. “Labor tidings are very important to both rate direction and Fed intentions,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. “Fed pricing is very flat until the September meeting,” and he added, that “seems fair, but if we begin to see cracks on the employment front bond markets will react.”

Beyond data, investors will monitor the progress of US lawmakers on passing a budget that includes new tax breaks, as well as President Donald Trump’s evolving trade policies.

What to Watch
* Economic data:
** June 2: S&P Global US manufacturing PMI; ISM manufacturing;
construction spending
** June 3: Factory orders; durable goods orders; capital goods
orders; JOLTS job openings; Wards total vehicle sales
** June 4: MBA mortgage applications; ADP employment; S&P Global
US services and composite PMIs; ISM services; Federal Reserve
Beige book
** June 5: Challenger job cuts; initial jobless claims; trade
balance; nonfarm productivity
** June 6: US employment report for May, non-farm payrolls,
unemployment rate; average hourly earnings; consumer credit
* Fed calendar:
** June 2: Dallas Fed President Lorie Logan; Chicago Fed
President Austan Goolsbee; chair Jerome Powell
** June 3: Governor Lisa Cook; Goolsbee; Logan
** June 4: Atlanta Fed President Raphael Bostic; Cook
** June 5: Governor Adriana Kugler; Philadelphia Fed President
Patrick Harker; Kansas City Fed President Jeff Schmid
* Auction calendar:
** June 2: 13-, 26-week bills
** June 3: 6-week bills
** June 4: 17-week bills
** June 5: 4-, 8-week bills