US Treasury Bond Yields Fall as Economic Data Boosts Rate Cut Speculation
On Thursday, benchmark 10-year US Treasury bond yields experienced a sharp decline, leading to a rebound in prices. This was driven by the release of the latest US economic data, which heightened optimism about a potential rate cut next year.
Following the release of the data, US Treasury yields of all maturities saw a widespread decline, effectively offsetting previous gains and maintaining near two-month lows. Notable decreases included a 7.2 basis point drop in the 2-year bond yield to 4.85%, a 9.8 basis point decrease in the 5-year bond yield to 4.425%, and a 9.4 basis point fall in the 10-year bond yield to 4.441%. Additionally, the 30-year US Treasury yield experienced a 7.5 basis point decline to 4.62%.
US Economic Data
The Labor Department’s data on US import and export prices for October revealed more declines than anticipated. Import prices fell by 0.8%, following a 0.4% upward revision in September, surpassing economists’ expectations of a 0.3% decline. Meanwhile, export prices dropped by 1.1% in October, below the anticipated 0.5% decrease, after a 0.5% fall in September.
In addition, the Labor Department reported that initial jobless claims rose to 231,000 in the week ending November 11, exceeding economists’ expectations of 220,000.
Expert Analysis
Nancy Vanden Houten, chief US economist at Oxford Economics, commented on the initial jobless claims, stating that they align with the current state of the job market. She noted that the market has cooled to a point where raising interest rates is infeasible, but is still strong enough to preclude an immediate rate cut consideration.
Vanden Houten also emphasized that while the Fed was encouraged by recent inflation data, it would require further evidence of a slowdown in the labor market and wage growth to confidently assert that sustainable inflation returning to 2% is attainable.
Federal Reserve Report
The Federal Reserve released a report showing that industrial production experienced a more significant decline than expected in October, partially attributed to strikes at several major car manufacturers.
Benchmark 10-year US Treasury bond yields fell sharply on Thursday (16th), sending prices rebounding, as the latest batch of US economic data boosted recent optimism about a rate cut next year.
Data showed US Treasury yields of all maturities fell across the board overnight, largely offsetting Wednesday’s gains and continuing to hover at near two-month lows.
Among them, the US 2-year bond yield fell 7.2 basis points to 4.85%, the US 5-year bond yield fell 9.8 basis points to 4.425%, and the US 10-year bond yield fell 9.4 basis points to 4.441%. The 30-year US Treasury yield fell 7.5 basis points to 4.62%.
US import and export prices fell more than expected in October, Labor Department data showed on Thursday, capping a week of upbeat inflation data.
In terms of import data, import prices fell 0.8% in October, following an upward revision of 0.4% in September, which was higher than the 0.3% decline expected by economists. At the same time, the US Department of Labor said that after export prices fell 0.5% in September, export prices fell 1.1% in October, also below the 0.5% expected.
Another report from the Labor Department showed that initial jobless claims rose to 231,000 in the week ending November 11, an increase that was higher than expected by 220,000.
Nancy Vanden Houten, chief US economist at Oxford Economics, said the initial data on jobless claims was consistent with the job market situation The job market has cooled enough to make raising interest rates impossible, but it is too strong to do so in the short term Consider cutting interest rates.
He added that the Fed was certainly encouraged by recent inflation data, but it would need to see a further slowdown in the labor market and wage growth to be confident that inflation returning to 2% is sustainable.
The Federal Reserve also released a report showing that industrial production fell more than expected in October, partly due to strikes at several major car manufacturers.
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