Treasury yields mixed ahead of inflation data
US Treasury yields were mixed early Thursday as investors eagerly awaited the release of inflation data later in the morning.
The yield on the benchmark 10-year Treasury fell 2 basis points to 1.9270% at 4 a.m. ET. The yield on the 30-year Treasury bond was little changed and stood at 2.3022%. Yields move inversely to prices and 1 basis point equals 0.01%.
February’s Consumer Price Index is due out at 8:30 a.m. ET. Economists expect headline inflation to have risen 0.7% last month, or 7.8% from a year earlier, according to Dow Jones estimates.
Investors will be eyeing inflation data, given concerns over the recent spike in commodity prices due to the Russian-Ukrainian war. The fear has been that rising commodity prices could drive up headline inflation, while slowing economic growth, also known as “stagflation”.
However, commodities including oil, silver and wheat fell on Wednesday. The decline in oil prices came amid indications of possible progress by the United States to encourage greater oil production from other sources. This follows the announcement of sanctions on Russian oil imports, in response to its invasion of Ukraine.
The foreign ministers of Russia and Ukraine are meeting in Turkey on Thursday for talks, hoping that a peace deal for Ukraine is in sight.
Anu Gaggar, global investment strategist for Commonwealth Financial Network, said on Wednesday she believed that if the CPI index sheds light on the impact of rising energy prices on inflation, it ” would only reinforce the Fed’s robust tightening cycle.”
“Even if a deal is magically struck tomorrow, sanctions are unlikely to be lifted quickly, meaning fossil fuel prices could stay higher for longer,” she said.
In addition to the inflation data, the number of unemployment insurance claims filed during the week ended March 5 is expected to be released Thursday at 8:30 a.m. ET.
Auctions are scheduled for Thursday for $45 billion in 4-week bills, $35 billion in 8-week bills and $20 billion in 30-year bonds.
— CNBC’s Hannah Miao, Yun Li and Holly Ellyatt contributed to this market report.