Yields Retreat Across Maturities
U.S. Treasury yields fell on Tuesday as energy prices moved lower in early trading, with investors turning their attention to a series of economic data releases scheduled for later in the week, including the latest inflation figures. The 10-year Treasury note yield, a key benchmark for mortgages, auto loans, and credit card debt, dropped more than 5 basis points to 5.1937%. The 30-year Treasury yield, which often reacts to geopolitical developments, declined 4 basis points to 5.5580%. The 2-year Treasury yield, which is more sensitive to short-term Federal Reserve rate decisions, slipped more than 2 basis points to 4.7658%. A basis point is equivalent to 0.01%, or one-hundredth of a percentage point, and yields and prices move in opposite directions.[S1]
After being shut Monday in observance of Columbus Day, U.S. Treasury trading resumed on Tuesday. Borrowing costs slid as crude prices dropped sharply that day, with market participants still weighing whether additional Russian diesel will reach world energy markets now that Washington has brokered a so-called energy ceasefire between Russia and Ukraine. By 3:50 a.m. ET, West Texas Intermediate contracts for November delivery had fallen 1.49% to $92.34 per barrel.[S1]
Inflation Data in Focus
This week brings a heavy slate of domestic economic reports that investors expect to clarify where U.S. inflation stands and how interest rates may move. Consensus projections put Wednesday's September annual inflation reading at 3.7%, higher than August's 3.4%. Core prices, which strip out food and energy, are forecast to edge up to 2.5% year over year from 2.4% in August. September's monthly producer price index and retail sales numbers are then due on Thursday.[S1]
