Treasury Yields Fall Ahead of Key Inflation Data

Yields on US Treasuries fell early on Friday, ahead of the release of key inflation data later in the morning.

Performance on the benchmark index 10-year Treasury bond fell 3 basis points to 1.4944% at 4.20 am ET. Performance in the 30-year Treasury Bond it also fell 3 basis points to 2,056%. Yields move inversely to prices and 1 basis point equals 0.01%.

The 10-year rate surpassed 1.56% earlier in the week, its highest point since June, amid investor concerns about the persistence of inflation and tighter monetary policy.

The August Basic Personal Consumption Expenditure Price Index, the inflation measure used by the Federal Reserve to guide its policy schedule, will be released at 8:30 am ET on Friday. Economists surveyed by Dow Jones have forecast the core CPI to rise 0.2% in August and 3.5% year-on-year.

Geoffrey Yu, senior market strategist at BNY Mellon, told CNBC “Squawk Box Europe“On Friday the United States may be in a” slightly better position “than other countries when it comes to increasing prices. He explained that both the producer price index and the CPI were at high levels in the United States, which meant that companies could pass some of that price pressure on to the underlying consumer.

By comparison, China’s PPI was “very problematic,” but the CPI was “barely 1%,” Yu said, putting more pressure on the company’s margins and profits.

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Personal income and spending data for August will also be released at 8:30 am ET.

Markit’s final Manufacturing Purchasing Managers Index for September will be released at 9:45 am ET, while ISM’s Manufacturing PMI for last month will be released at 10 am ET.

Additionally, data on US construction spending for August is scheduled to be released at 10 am ET.

Meanwhile, Congress was prepared to avoid a government shutdown on Thursday. The Senate and House passed a short-term appropriations bill that would keep the government running until December 3 and sent it to President Joe Biden to sign.

There are no auctions scheduled for Friday.

CNBC’s Yun Li contributed to this market report.

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