In a continuation of the downward trend observed in recent sessions, treasury markets experienced a significant decline during Thursday's trading. Initially, bond prices showed slight decreases, but as the day progressed, they further extended into negative territory. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, rose by 5.3 basis points, reaching 4.324 percent.
This increase marked the fourth consecutive session where the ten-year yield has risen, signifying a recovery after closing at its lowest level in over a month last Friday.
The ongoing weakness in treasuries was influenced by a report from the U.S. Labor Department, indicating a larger-than-anticipated rise in producer prices for November. According to the Labor Department, the producer price index for final demand advanced by 0.4 percent in November, following a revised 0.3 percent increase in October. Economists had projected a more modest 0.2 percent rise, consistent with the initial report for the previous month.
Moreover, the report highlighted that the annual growth rate of producer prices accelerated to 3.0 percent in November, up from an upwardly revised figure of 2.6 percent in October. It was anticipated that the annual rate would rise to just 2.6 percent from the originally reported 2.4 percent for the prior month.
Although the Federal Reserve is still widely expected to reduce interest rates in the upcoming week, the recent data has sparked concerns regarding the pace at which the central bank will implement rate cuts in the early months of next year.
Looking ahead to Friday, a report on import and export prices may draw interest as traders seek further insights into the inflation outlook.
The material has been provided by InstaForex Company -
www.instaforex.com
