U.S. bond yields rose early Thursday as traders waited for the January personal consumption expenditure data data expected to show inflation picked up last month.What’s happening
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
added 3.2 basis points to 4.672%. Yields move in the opposite direction to prices.
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
rose 2.4 basis points to 4.290%.
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
climbed by 2.5 basis points to 4.431%.
What’s driving markets The main focus for investors on Thursday is the personal consumption expenditure price index data for January, due for release at 8:30 a.m. Eastern.
Economists forecast the annual headline PCE growth to slow from 2.6% in December to 2.4% last month. The annual core reading — which strips out some volatile items like food and energy — is expected to be steady at 2.8%. However, the month-on-month headline rate is forecast to pick up from 0.2% to 0.3% and the core to rise from 0.2% in December to 0.4% in January. The PCE report is considered the Federal Reserve’s favored inflation gauge, and so if it shows the month-on-month rise as expected then it should cement expectations that the central bank may not start cutting borrowing costs until the summer. Markets currently are pricing in a 97.5% probability that the Fed will leave interest rates unchanged at a range of 5.25% to 5.50% after its next meeting on March 20th, according to the CME FedWatch tool. The chances of at least a 25 basis point rate cut by the subsequent meeting in May is priced at 20%, down from 88.3% just a month ago. The chances of at least a …
Article Attribution | Read More at Article Source
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
added 3.2 basis points to 4.672%. Yields move in the opposite direction to prices.
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
rose 2.4 basis points to 4.290%.
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
climbed by 2.5 basis points to 4.431%.
What’s driving markets The main focus for investors on Thursday is the personal consumption expenditure price index data for January, due for release at 8:30 a.m. Eastern.
Economists forecast the annual headline PCE growth to slow from 2.6% in December to 2.4% last month. The annual core reading — which strips out some volatile items like food and energy — is expected to be steady at 2.8%. However, the month-on-month headline rate is forecast to pick up from 0.2% to 0.3% and the core to rise from 0.2% in December to 0.4% in January. The PCE report is considered the Federal Reserve’s favored inflation gauge, and so if it shows the month-on-month rise as expected then it should cement expectations that the central bank may not start cutting borrowing costs until the summer. Markets currently are pricing in a 97.5% probability that the Fed will leave interest rates unchanged at a range of 5.25% to 5.50% after its next meeting on March 20th, according to the CME FedWatch tool. The chances of at least a 25 basis point rate cut by the subsequent meeting in May is priced at 20%, down from 88.3% just a month ago. The chances of at least a …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]