U.S. Treasury yields fell on Tuesday after the latest retail sales report missed expectations.
The benchmark 10-year Treasury yield was more than 5 basis points lower at 4.145%, as was the 30-year Treasury yield at 4.792%. The 2-year Treasury note yield was down more than 2 basis points at 3.456%.
One basis point is equivalent to 0.01%, and yields and prices move in opposite directions.
Yields took a leg lower after retail sales for December came in flat month-on-month, below the Dow Jones forecast for a 0.4% increase. The weak holiday sales followed a 0.6% increase in November, according to numbers adjusted for seasonality but not inflation.
“Even with a rising stock market, consumers continue to show a lack of confidence,” said Todd Schoenberger, chief investment officer at CrossCheck Management. “The economic margin for error is dangerously thin and today’s data proves people are not only concerned about their personal financial picture, but are more than likely too extended with credit.”
Markets are now anticipating other backlog of data delayed by the partial U.S. government shutdown. Among the key releases is the January nonfarm payrolls report, now scheduled for Wednesday after being postponed from last Friday.
Attention will turn to January consumer price data, due Friday. Forecasts point to a slight cooling in annual inflation to 2.5%, according to the same survey.
There will be data on weekly initial jobless claims on Thursday as well.
Meanwhile, investors are continuing to track developments in China after Bloomberg News reported that authorities have encouraged banks to scale back exposure to U.S. Treasurys due to concerns over concentration risk and volatility.
[/gpt3]
