US treasury yield curve flattens further, diff between 10-yr & 2-yr yield hits 10-month low

US treasury yield curve flattened further after the data released in the US on Monday showed the durable goods orders dropped 1.1% in May. Manufacturing activity in the Chicago and Dallas regions also fell short of expectations.

The weak data saw investors move into the long end of the treasury yield curve. Thus, the difference between the 10-year yield and the 2-year yield fell to a 10-month low of 0.758 basis points.  

The difference between the 5-year yield and the 30-year yield dropped to 93.1 basis points, the flattest since 2007.

Despite the flattening of the yield curve, the USD remains well bid, especially against the Japanese Yen as investors fear the Fed may ignore weak data and proceed with policy normalization as suggested by the BIS over the weekend.