The U.S. 10-year Treasury yield hovered just below 4% on Friday ahead of data on producer prices and results from the biggest U.S. banks.
What’s happening
-
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
was 4.27%, up 1.2 basis points. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
was 3.98%, up 1.3 basis points. -
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
was 4.19%, up 1.5 basis points.
What’s driving markets
Data on Thursday showing slightly stronger than forecast U.S. consumer prices has cast doubts on whether the Federal Reserve will start cutting interest rates in March, a point amplified by a comment from Cleveland Federal Reserve President Loretta Mester.
“Stronger than forecast headline CPI led by another punchy rise in rents and other services cast doubts over the timing of a first rate cut by the Fed this year, and keeps 10y UST yields frozen at 4%,” said Societe Generale strategists led by Kenneth Broux.
“Bond and FX market reaction was muted and until incoming data paints a different picture, we could be stuck in limbo straddling narrow ranges for a while.”
Friday’s session includes PPI data as well as results from big banks including JPMorgan Chase, Bank of America and Citi.
Oil futures
CL00,
rose after the U.S. and the U.K. launched air strikes on Houthi targets after attacks on ships in the Red Sea, further complicating the inflation picture.
