On Friday, bond yields made a swift turnaround as investors eagerly awaited important inflation data.
- The yield on the 2-year Treasury TMUBMUSD02Y, 4.874% dropped by 6.2 basis points to 4.87%. It’s worth noting that yields move inversely to prices.
- Similarly, the yield on the 10-year Treasury TMUBMUSD10Y, 3.978% fell by 2.6 basis points to 3.98%.
- Additionally, the yield on the 30-year Treasury TMUBMUSD30Y, 4.035% decreased by 1.4 basis points to 4.03%.
Factors Influencing the Market
Thursday witnessed a significant surge in yields due to strong economic reports from the United States, a leak about the Bank of Japan potentially adjusting its yield control program, and an auction of 7-year notes that failed to generate positive response.
This surge of 16 basis points in the 10-year yield was the most substantial since September 26, 2022.
Upcoming Inflation Releases
On Friday, investors look forward to two major releases focusing on inflation:
- PCE Price Index: This particular index holds significance for the Federal Reserve, as it is their preferred gauge of inflation.
- Quarterly Employment Cost Index: An essential measure of wages.
Both sets of data will be made available at 8:30 a.m. Eastern.
It is anticipated that the core PCE price index will experience a monthly increase of 0.2%, while the employment cost index is projected to rise by 1.1%.