US Treasury debt prices eased modestly on Thursday as investors resigned themselves to the prospect of further interest rate rises and the latest data did little to alter their views.
If anything, a surge in prices paid by mid-Atlantic region manufacturers renewed inflation fears among bond investors, particularly after an unexpected spike in core consumer prices reported on Wednesday.
Wall Street generally expects the Federal Reserve to boost official rates to 5 percent at its next policy meeting in May, but sees the potential need for further moves as highly dependent on news on the US economy.
With a regional manufacturing survey, weekly jobless claims and leading indicators all coming in close to forecasts, traders had to look to more volatile markets for excitement.
There was plenty of volatility, especially in stocks and precious metals. Major equity indexes hit five-year highs while gold skidded more than 2 percent lower.
Treasuries were moving at a much more leisurely pace, with benchmark 10-year notes off just 3/32 and yielding 5.04 percent, near highs not seen since mid-2002.
"We're not that busy," admitted David Ader, government bond strategist at RBS Greenwich.
Two-year notes dipped 2/32 to yield 4.89 percent, up from 4.86 percent on Wednesday. Five-year debt eased 4/32 for a yield of 4.92 percent, while the 30-year bond slipped 5/32 to yield 5.14 percent.
The Philadelphia Fed's index of business conditions rose to 13.2 in April from 12.3 in March, while the prices paid component jumped to 29.0 from 17.2.
Weekly jobless claims remained above 300,000, a level consistent with decent but not spectacular job creation, while leading indicators ticked 0.1 percent lower.
Neither was likely to sway the Fed in either direction as it mulls a possible pause in interest rate hikes, analysts said.
Comments
Comments are closed.