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The Treasury market moved in a listless fashion on Tuesday in response to the U.S. intervention in Venezuela — with traders more focused on a busy calendar week that includes Friday’s jobs report for December.
Bond-market investors have been waiting for a string of clean reads on the U.S. labor market from the Bureau of Labor Statistics following October’s and November’s nonfarm-payrolls reports, which were released after the end of last year’s government shutdown. Friday’s jobs data may be just enough to inspire investor confidence, according to strategists at BMO Capital Markets.
The U.S. economy is expected to have produced 73,000 jobs last month, up from 64,000 in November, while the unemployment rate is seen as dropping to 4.5% from 4.6% previously, based on the median estimates of economists. ADP’s private-sector employment report will come out on Wednesday, two days ahead of the government’s data, but is not often seen as a reliable harbinger. Separately, the U.S. Supreme Court may rule on the legality of President Trump’s global tariffs on Friday — the same day that December’s labor-market data comes out — which is likely to also have some implications for the bond market.
Read: Stock market braces for a crucial jobs report after a lackluster start to 2026
“Rates and credit are trading [on] U.S. growth, inflation and what the Fed does next,” said portfolio manager Vincent Ahn at Wisdom Fixed Income Management in Plano, Texas. “That is why something like Friday’s jobs report matters more for the Treasury market than Venezuela. Venezuela only shows up if it causes a lasting move in oil that feeds into gasoline and inflation, and that is not what the market is seeing right now.”
In other words, “Venezuela is not moving the bond market because it is not moving the inflation story,” Ahn added in an email to MarketWatch.
“From a trading perspective, I think Venezuela headlines are real, but for the short term, they are mostly about where a few barrels go and how messy the logistics are,” he noted. “The global oil balance still looks comfortable, and any meaningful Venezuelan supply change would likely take time. Without a sustained oil move that changes the inflation trajectory, Treasurys and broad U.S. credit spreads have bigger things to react to.”
On Tuesday, conditions in Venezuela remained tense, with security forces seen on the streets after the past weekend’s U.S. intervention that resulted in the capture of ousted President Nicolás Maduro. Separately, European leaders lent their support to Greenland after Trump renewed his threat to take over the Denmark-controlled territory.
Tuesday’s trading session was marked by up-and-down swings in oil prices CL00 CL.1 — with Brent crude BRN00, the international benchmark, at almost $61 a barrel. Meanwhile, the bond market saw a modest selloff in everything from the 1-year Treasury bill BX:TMUBMUSD01Y through the 30-year bond BX:TMUBMUSD30Y, leaving yields such as the 10-year rate BX:TMUBMUSD10Y slightly higher on the day. This was in contrast to Monday’s bond-market moves, which produced a modest rally that sent Treasury yields a touch lower. Bond prices move in the opposite direction of yields.
FHN Financial strategist Will Compernolle, who is based in Chicago, chalked up Tuesday’s Treasury-market selloff to “random movements” ahead of a busy week of calendar-driven events, as well as trading volumes that are normalizing at the beginning of the year.
As far as Venezuela developments go, “the market is not seeing the likelihood of the same disruption as a Middle East involvement,” Compernolle said in a phone interview. “We haven’t seen the possibility of geopolitical instability or increased oil prices and disruptions to global supply.” Therefore, “there’s been no impulse” toward the flight-to-safety trade in the bond market, he noted.
For a U.S. intervention like the one currently unfolding, “we would see the impacts through two different channels,” he added. “One is the price of oil, which could impact inflation expectations, and the other is the federal deficit” — given questions around whether the U.S. presence in Venezuela might turn into another long, costly engagement like the wars in Iraq and Afghanistan.
While some strategists have drawn comparisons between the intervention in Venezuela and past actions like the U.S.’s invasion of Panama in 1989 and its involvement in Chile in 1990, Compernolle said it is too early to tell if current events will be similar to previous episodes.
In Venezuela, “most of that existing government is still there,” he said. “We don’t know if something is going to topple over, or if the U.S. is going to have a more aggressive presence in that regime change.”
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