U.S. Treasury yields edged higher on Thursday as investors mulled over the latest inflation data and looked ahead to further key economic reports.
At 7:08 a.m. ET, the yield on the 10-year Treasury was up by one basis point to 4.665%. The 2-year Treasury yield was last over two basis points higher to 4.287%.
Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
Treasurys
Treasury yields had tumbled Wednesday, with the 10-year yield dropping as much as 13 basis points and the 2-year yield falling as much as 10 basis points.
The move lower came after the release of December’s consumer price index, which showed that the core-CPI print slowed to 3.2% on an annual basis, less than the 3.3% forecast by economists polled by Dow Jones. Core inflation, which strips out more volatile food and energy prices, grew 0.2% from the previous month, which was also lower than expected.
Headline inflation meanwhile was up 0.4% on a monthly basis and 2.9% on an annual basis. The data somewhat soothed concerns about a potential re-acceleration of inflation.
Further key data is due Thursday in form of December’s retail sales figures. According to a Dow Jones consensus estimate, the report is expected to show a 0.5% increase in December, which would be lower than the previous month’s 0.7% rise.
Weekly initial jobless claims are also due Thursday, before the latest building permit and housing starts data which is slated for Friday.
Investors are watching the reports closely as they look ahead to the upcoming Federal Reserve meeting on Jan. 28-29. Even after the broadly softer-than-expected core inflation print, traders were last still pricing in a 97.3% chance of rates being held steady at the next meeting, CME Group’s FedWatch tool showed.