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Treasury yields mixed on inflation data

US Treasury yields were mixed on Wednesday morning, following data showing lower-than-expected inflation.

The benchmark 10-year Treasury bill yield rose less than a basis point to 1.28% at 3:50 am ET. The yield on the 30-year Treasury bill fell almost 1 basis point to 1.845%. Yields move in the opposite direction of prices and 1 basis point equals 0.01%.

The 10-year yield fell to 1.277% on Tuesday, after August’s consumer price index rose 5.3% year-on-year, below a forecast of 5.4%. Core CPI rose only 0.1% month-on-month in August, below an expected increase of 0.3%.

Willem Sels, chief investment officer, private banking and wealth management at HSBC, said on Tuesday that the data should “reassure that inflation does not appear to be accelerating any further, and that the Fed can therefore take a gradual approach to normalization of its politics. and tapered. “

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Sels said HSBC expected inflation to drop later in the year, in part because “the base effects of commodity prices will become more deflationary towards the end of the year.”

“However, there is uncertainty as to the speed and magnitude of the fall, as many variables influence inflation,” he added, referring to the increased spread of the delta variant and the problems supply chain.

As for economic data expected on Wednesday, August import and export prices are expected to be released at 8:30 a.m. ET. August industrial production data is then expected to be released at 9:15 a.m.ET.

An auction will take place on Wednesday for $ 30 billion in 119-day bills.

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