Monday, February 6, 2023

US bond yields fall after retail sales data and Bank of Japan decision

by Karen Brettel

Nuevanew yorkJan 18 – The yield on 10-year US Treasury bonds hit a four-month low on Wednesday, after data showed US retail sales fell more than expected in December and the Bank of Japan kept its loan yield capped.

* US retail sales were hit by a decline in purchases of motor vehicles and other goods, consumer spending and the broader economy on a weak growth path into 2023.

* Similarly, US producer prices declined more than expected in December as the cost of energy products and food declined, providing further evidence that inflation is easing.

“The data” is “part and parcel of this convergence,” said David Petrocinelli, a trader at InsperX in New York, from a regressive Fed to a Fed that is now aggressively tightening rates and … signs of the end of that process. is on the side.

* The yield on benchmark 10-year notes operated at 3.375%, the lowest level since Sept. 13, while that on the two-year paper hit 4.072%, the lowest since Oct. 4.

* The yield spread between the two-year and 10-year bonds stood at -72 basis points.

* Returns were subdued early on Wednesday after the Bank of Japan kept its rates ultra-low, including a bond yield cap it has been struggling to protect.

* The US Treasury will sell $12 billion in 20-year bonds on Wednesday and $17 billion in 10-year inflation-protected debt on Thursday.

Nation World News Desk
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