The 10-year U.S. Treasury yield rose slightly on Thursday as investors digested reports that show

The yield on the benchmark 10-year Treasury note rose by 1 basis points to 1.738{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58} at 8:40 a.m. ET. The yield on the 30-year Treasury bond climbed 1 basis points to 2.081{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58}. Yields move inversely to prices and 1 basis point is equal to 0.01{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58}.

The December producer price index, a gauge of inflation, showed a gain of 0.2{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58} month over month, roughly half as much as expected. However, the year over year increase was an eye-popping 9.7{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58}.

The consumer price index, released Wednesday, grew by 7{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58} in the 12 months to December. On a monthly basis, CPI increased 0.5{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58}. Economists expected the consumer price index to rise 0.4{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58} in December, and 7{15a62de520214ebc8ccae29094829783e2fffb72751c03e26bff23f26cd2ba58} on a year-over-year basis, according to Dow Jones. 

Yields moved lower on Wednesday despite the hot CPI reading. The 10-year yield jumped sharply the previous week before pulling back slightly in the last two sessions, suggesting that high inflation numbers were already priced in to the market.

Stock picks and investing trends from CNBC Pro:

“The inflation stats are red hot but should top out on a y/o/y basis by February because of tougher comps but I’ll say again, that any easing in producer price pressures will not quickly show up in a reduction in consumer prices because the former has run much faster than the latter and that means consumer price increases will continue to catch up,” Peter Boockvar of Bleakley Advisory Group said in a note.

On the labor front, the number of jobless claims filed during the week ended Jan. 8 came in at 230,000. Economists polled by Dow Jones forecast that 200,000 people filed for unemployment. However, continuing unemployment claims declined.

Meanwhile, Federal Reserve Governor Lael Brainard is due to testify before the U.S. Senate for her nomination hearing to the role of the central bank’s vice chair.

Auctions are scheduled to be held for $50 billion of 4-week bills, $40 billion of 8-week bills and $22 billion of 30-year bonds.

CNBC’s Maggie Fitzgerald contributed to this market report.

By Hanna

Leave a Reply