Bond yields fell on Monday as investors digested the flurry of data released last week and questioned whether the US Federal Reserve could slow its tightening cycle on improving news on the inflation
The benchmark 10-year Treasury yield was 2 basis points lower at 2.824% as the week began, while the 30-year Treasury yield was down 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 flurry of economic data, including more positive news on inflation than many in the markets expected. Last week’s data showed imports fell slightly more than expected, lower export prices and higher-than-expected consumer sentiment in a preliminary August reading of the University’s index of Michigan.
The steady rise in US consumer prices also slowed to an 8.5% year-on-year increase in July, data showed last week, which was slightly less than expected due to the decrease in oil prices.
Even so, the Fed has yet to buy into the bond market’s apparent view that the rate hike cycle is nearly over.
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Investors will look this week to housing data, including housing starts, mortgage applications and building permits, as well as retail sales, industrial production, manufacturing output and year-over-year data from the Redbook. The Redbook Index is a measure of the sales-weighted annual growth of 9,000 US retailers.
Auctions for 13-week and 26-week US Treasuries expire on Monday.
Fed Governor Christopher Waller is scheduled to speak at the 2022 Summer Workshop on Money, Banking, Payments and Finance in Washington DC hosted by the Board of Governors of the Federal Reserve.
This week will also see a series of Chinese data on retail sales, home prices and sales, energy production and industrial production for July. Japan will announce its preliminary second-quarter gross domestic product figures this week.
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