Treasury yields fall as investors assimilate previous week’s data

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Bond yields fell on Monday as investors digested the flurry of data releases from the previous week and wondered if the US Federal Reserve could ease its tightening cycle on improving inflation news.

The yield on the benchmark 10-year Treasury was 2 basis points lower at 2.824% at the start of the week, while the yield on the 30-year Treasury fell 2 basis points to 3.0932% . Yields move inversely to prices and one basis point is equal to 0.01%.

The short-term 2-year Treasury yield rose just under a basis point to 3.2529%.

The previous week brought a slew of economic data, including more positive inflation news than many market participants expected. Last week’s data showed a slightly larger-than-expected drop in imports, weaker export prices and stronger-than-expected consumer sentiment in a preliminary August reading of the University Index. from Michigan.

Steady US consumer price inflation also slowed to an 8.5% year-on-year rise in July, data showed last week, slightly below expectations. due to a drop in oil prices.

Yet the Fed has yet to embrace the bond market’s apparent view that the rate hike cycle is almost over.

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Investors will be looking at housing data this week, including housing starts, mortgage applications and building permits, as well as retail sales, industrial production, manufacturing output and annual Redbook data. . The Redbook Index is a measure of weighted annual sales growth at 9,000 US retailers.

Auctions for 13- and 26-week US Treasuries are due to take place on Monday.

Fed Governor Christopher Waller is due to speak at the week-long 2022 Summer Money, Banking, Payments and Finance Workshop in Washington DC hosted by the Reserve Board of Governors federal.

A series of Chinese data is also due this week on retail sales, house prices and sales, energy production and industrial production for July. Japan will announce its preliminary gross domestic product figures for the second quarter this week.

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