Ahead of the Curve US Rates Strategy

RBC evaluates the US Rates outlook ahead of January's NFP and CPI data, suggesting that yields have likely returned to their long-term range of 4.00-4.20% for 10-year Treasuries.

Key Takeaways

• 1.US Treasury yields have returned to prior ranges (4.00-4.20% for 10s) following a mid-January selloff driven by temporary factors and strong data.
• 2.January payrolls are expected to show a 'low hiring, low firing' environment; RBC forecasts +63k, slightly below the +69k consensus.
• 3.Inflation prints in January are likely to be elevated due to seasonal price resets and potential tariff-related price hikes.

Table of Contents

• Pre-NFP/CPI thoughts
• January Employment Report (Wednesday):
• January CPI (Friday):
• Disclaimer

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