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Treasury yields edged slightly higher Thursday, as investors awaited a busy slate of U.S. economic data, including August retail sales.
What are yields doing?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.317%
traded at 1.305%, compared with 1.302% at 3 p.m. Eastern on Wednesday. -
The 2-year Treasury note yield
TMUBMUSD02Y,
0.217%
fell to 0.209%, down from 0.213% Wednesday afternoon. -
The 30-year Treasury bond yield
TMUBMUSD30Y,
1.873%
was 1.868%, unchanged from Wednesday.
What’s driving the market?
Treasury traders continue to look to the flow of U.S. economic data for clues to when the Federal Reserve will begin scaling back its monthly asset purchases and, beyond that, begin raising interest rates.
Investors have a busy slate of data to sift through Thursday, highlighted by the August retail sales report at 8:30 a.m. Eastern. Economics surveyed by The Wall Street Journal expect sales to show a decline of 0.7%. Excluding autos, sales are seen up 0.2%.
Also at 8:30 a.m., investors will get a look at the latest reading on weekly jobless claims, with first-time applications for benefits expected to rise to 318,000 in the week ended Sept. 11, versus a pandemic low of 310,000 seen the previous week.
A September reading on the Philadelphia Fed’s manufacturing index is also due at 8:30 a.m., while August business inventories data is due at 10 a.m.
What are analysts saying?
“We see risks for today’s U.S. August retail sales slightly tilted to the downside as consumer sentiment tanked last month (U. of Michigan, Conference Board) on inflation and delta virus worries,” wrote analysts at Brussels-based KBC Bank, in a note. “The unexpectedly very poor July report provides some counterweight in our assessment as it (statistically) lowers the bar.”
In the case of a disappointing August reading, it may cast more market doubts on the Fed’s tapering intentions ahead of the Sept 22 FOMC, they said, which “could weigh on U.S. yields and keep the dollar in a defensive position.”
