Treasuries See Further Upside Following Yesterday's Rebound
Following the significant rebound seen during Tuesday’s session, treasuries saw some further upside during trading on Wednesday.
Bond prices moved higher early in the day and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.0 basis points to 4.595 percent.
The ten-year yield added to the 12.9 basis point plunge seen on Tuesday, pulling back further off its highest levels in over sixteen years.
Treasuries continue to benefit from their appeal as a safe haven amid the deadly conflict between Hamas and Israel.
Meanwhile, traders largely shrugged off a Labor Department report showing producer prices in the U.S. increased by slightly more than expected in the month of September.
The Labor Department said its producer price index for final demand climbed by 0.5 percent in September after advancing by 0.7 percent in August. Economists had expected prices to rise by 0.4 percent.
The producer price growth was partly due to a continued surge in energy prices, which spiked by 3.3 percent in September after skyrocketing by 10.3 percent in August.
The report also said the annual rate of producer price growth accelerated to 2.2 percent in September from a revised 2.0 percent in August.
Economists had expected the pace of price growth to come in unchanged compared to the 1.6 percent originally reported for the previous month.
“Officials are committed to reigning in inflation, but we expect prices to slow enough over the coming quarters to keep additional rate hikes off the table,” said Matthew Martin, U.S. Economist at Oxford Economics.
On Thursday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of September.
Trading on Thursday is likely to be driven by reaction to the report on consumer price inflation, while the weekly jobless claims data may also attract some attention.
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