The Treasury is focused as investors await economic data

Long-term yields on US Treasuries edged lower on Friday as market participants sorted through a busy week of economic data.

The benchmark 10-year Treasury yield fell 5 basis points to 2.84%. The yield on the 30-year Treasury note was also down about 5 basis points to 3.108%. Yields move inversely to prices, and one basis point is equal to 0.01%.

The short-term 2-year Treasury yield edged up a few basis points to 3.25% after falling in the previous session.

Friday brought more positive news on inflation. Imports fell 1.4% in July. Economists polled by the Dow Jones expected a 1% decline. Export prices also fell more than expected.

August’s preliminary reading of the University of Michigan’s index of consumer sentiment was higher than expected, and the report also showed that one-year inflation expectations fell slightly. However, three-year inflation expectations rose.

Early on, the producer price index fell 0.5% from June, the first month-on-month decline since April 2020, the month after the Covid-19 pandemic was declared. Economists polled by the Dow Jones expected an increase of 0.2%.

The PPI marked a second report this week that pointed to easing price pressures. Data on Wednesday showed that US consumer prices rose 8.5% year-on-year in July, slowing from the previous month largely due to a drop in oil prices. Economists had expected an annual rise of 8.7%.

The data reflected a slowdown in inflation and led investors to question the prospect of the Federal Reserve slowing the pace of rate hikes as soon as September.

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