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Treasury yields were broadly lower Thursday morning after the U.S. March producer price data showed the biggest decline in almost three years.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
3.932%
was 3.937%, down from 3.970% as of Wednesday. -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.387%
slipped to 3.387% from 3.419% Wednesday afternoon. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.627%
was 3.623%, down from 3.653% late Wednesday.
What’s driving markets
In data released on Thursday, wholesale inflation posted its biggest drop since the start of the pandemic in early 2020, according to the March producer price index. U.S. wholesale prices sank 0.5% last month in a sign of potentially further easing in inflation ahead, and the increase over the past 12 months slowed to 2.7% from 4.9% in the prior month.
The number of Americans who applied for unemployment benefits last week rose by 11,000 to 239,000, indicating a small but steady increase in layoffs in a generally strong U.S. labor market.
At 1 p.m. Eastern time, there is an auction of $18 billion worth of 30-year bonds.
On Wednesday, the Labor Department reported that the year-over-year rise in the consumer price index slowed to 5% in March, while minutes from the last Federal Open Market Committee meeting showed policy makers were keenly worried about the impact of banking-sector stress on the economy.
What analysts are saying
“Producer inflation is clearly in retreat,” said Chris Low, chief economist at FHN Financial in New York. “For a Fed already inclined to pause, this report tips the scale just a bit more in favor, especially after yesterday’s CPI failed to reveal any new inflationary problems.”
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