Bonds yields ticked downward on Monday, as investors digested the previous week’s wave of data releases and questioned whether the U.S. Federal Reserve may slow its tightening cycle on improved inflation news.
The yield on the benchmark 10-year Treasury note was 2 basis points lower at 2.824% as the week began, while the yield on the 30-year Treasury bond dipped by 2 basis points to 3.0932%. Yields move inversely to prices, and a basis point is equal to 0.01%.
The shorter-term 2-year Treasury yield was up just under one basis point at 3.2529%.
The previous week brought a raft of economic data, including more positive news on inflation than many in the markets were expecting. Data last week revealed imports down slightly more than expected, lower export prices and higher-than-forecast consumer sentiment in a preliminary August reading from the University of Michigan’s index.
The steady climb in U.S. consumer prices also slowed to an 8.5% year over year rise in July, data from last week showed, which was slightly less than expected due to a decrease in oil prices.
Still, the Fed has yet to adopt the bond market’s apparent outlook that the rate hiking cycle is almost over.
Investors will be looking ahead this week to housing data, including housing starts, mortgage applications and building permits, as well as retail sales, industrial production, manufacturing production and year-on-year Redbook data. The Redbook index is a measure of yearly sales-weighted growth across 9,000 U.S. retailers.
Auctions for the U.S. 13-week and 26-week Treasury bills are due Monday.
Fed Governor Christopher Waller is scheduled to speak at the week-long 2022 Summer Workshop on Money, Banking, Payments, and Finance in Washington D.C. hosted by the Federal Reserve Board of Governors.
A raft of Chinese data is also due this week on retail sales, housing prices and sales, energy output, and industrial output for July. Japan will announce its preliminary second-quarter gross domestic product figures this week.