Treasury yields rise following jobs, inflation data

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U.S. Treasury yields rose on Friday morning, as investors weighed up the slew of key economic data that came out throughout the week.

The yield on the benchmark 10-year Treasury note climbed by more than 2 basis points to 1.544% at 4 a.m. ET. The yield on the 30-year Treasury bond added 2 basis points, rising to 2.047%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

September’s producer price index, released on Thursday, rose slightly less than expected. Month-on-month, the index showed wholesale prices had increased by 0.5%, compared with a Dow Jones estimate of 0.6%.

However, September’s consumer price index, released on Wednesday, came in ahead of estimates. Consumer prices climbed 0.4% on the previous month, versus a Dow Jones forecast of 0.3%. Year-on-year prices inflated by 5.4%, compared to an estimate of 5.3%.

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In addition, Labor Department data released Thursday showed that there were fewer than 300,000 jobless claims filed in the week ended Oct. 9, for the first time since the beginning of the coronavirus pandemic. There were 293,000 unemployment insurance claims filed last week, lower than the 318,000 estimate.

Both inflation and jobs data are being closely monitored by the Federal Reserve, to gauge when it will start to pull back its emergency stimulus measures, starting with the tapering of its bond buying program. Minutes from the Fed’s September policy meeting, released on Wednesday, showed that the central bank could start reducing its asset purchases as soon as mid-November.

Following this update, as well as the release of key data throughout the week, the 10-year Treasury yield has fallen back below the 1.6% mark.

Asked why this was the case, and the effect on stock markets, Bob Parker, an investment committee member at Quilvest Wealth Management, told CNBC’s “Squawk Box Europe” on Friday that market volatility in late September and early October appeared to have been driven by questions as to when central banks would tighten monetary policy, geopolitical concerns and weakness in the global economy.

However, he said that markets now seemed to be driven by an “acceptance that there will be tapering starting in November, definitely in December, so that’s now I think fully discounted in markets.”

On Friday, September’s retail sales data is due out at 8:30 a.m. ET. The University of Michigan’s preliminary consumer sentiment reading is then set to come out at 10 a.m. ET.

There are no auctions scheduled to be held on Friday.



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