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Long-dated Treasury yields rose Friday, but remained on track for a weekly decline, as investors awaited another round of U.S. economic data, including September retail sales.
What are yields doing?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.542%
rose to 1.542%, up from 1.519% at 3 p.m. Eastern on Thursday, after ending last week above 1.6%. -
The 2-year Treasury yield
TMUBMUSD02Y,
0.362%
was at 0.351%, little changed from 0.352% on Thursday. The short end of the yield curve has backed up this week, after the 2-year yield ended last Friday at 0.318%. -
The 30-year Treasury bond yield
TMUBMUSD30Y,
2.045%
rose to 2.048%, compared with 2.025% Thursday afternoon, but down from 2.161% at the end of last week.
What’s driving the market?
Long-dated yields have declined this week, flattening the yield curve — a line plotting yields across Treasury maturities. The moves come after a slightly hotter-than-expected September consumer-price index reading on Wednesday and a somewhat smaller-than-expected rise in the September producer-price index on Thursday.
The moves across the curve, according to some analysts, reflect growing worries of a policy error by the Federal Reserve, in which the central bank tightens policy more aggressively than previously anticipated in an attempt to get a grip on inflationary pressures that may be less “transitory” than policy makers initially anticipated.
Retail sales data will be in the spotlight Friday, due for release at 8:30 a.m. Eastern. Economists surveyed by The Wall Street Journal look for sales to fall 0.2%, after a 0.7% jump in August. Excluding autos, sales are seen up 0.5% after a 1.8% rise a month earlier.
The September import-price index is also due at 8:30 a.m. and is expected to show a 0.5% rise, while the New York Fed’s Empire State Index for October is expected to fall back to 26.5 from 34.4.
An October consumer-sentiment index reading and data on August business inventories are set for 10 a.m.
What are analysts saying?
Market moves on Thursday “once again lacked clear-cut drivers, but was mainly inspired by lower real yields,” wrote analysts at KBC Bank in Brussels. If anything, “it suggests that any future tightening cycle will be short-lived as central bankers might face a balancing act between inflation fighting and supporting a potential growth slowdown.”
