Treasury yields in focus as investors await economic data

Long-term US Treasury yields fell on Friday as market participants sorted through a busy week of economic data.

The yield on the benchmark 10-year Treasury fell 5 basis points to 2.84%. The 30-year Treasury bond yield also fell about 5 basis points to 3.108%. Yields move inversely to prices and one basis point is equal to 0.01%.

The shorter-term 2-year Treasury yield rose slightly to 3.25% in basis points after slipping in the previous session.

Friday brought more positive inflation news. Imports fell 1.4% in July. Economists polled by Dow Jones had expected a 1% decline. Export prices also fell more than expected.

August’s preliminary reading of the University of Michigan Consumer Confidence Index is higher than expected, and the report also showed that one-year inflation expectations fell slightly. However, three-year inflation expectations have increased.

Earlier in the week, the producer price index fell 0.5% from June, the first month-on-month decline since April 2020, the month after Covid-19 was declared a pandemic. Economists polled by Dow Jones had expected a 0.2% rise.

The PPI marked a second report this week indicating an easing of price pressures. Data on Wednesday showed U.S. consumer prices rose 8.5% year-on-year in July, slowing from the previous month largely on lower prices. oil price. Economists were expecting an annual increase of 8.7%.

The data reflected a slowdown in inflation and prompted investors to question the Federal Reserve’s prospects of slowing the pace of rate hikes as early as September.

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