US Treasuries: Yields under pressure after weaker-than-expected CPI data

U.S. Treasury yields remained under pressure on Friday weighed by the lower-than-expected U.S. inflation data and the escalating geopolitical tension between the U.S. and North Korea.

In a tweet on Friday, US President Donald Trump said that military solutions were fully in place, should North Korea act unwisely, keeping the demand for safe-havens like the U.S. Treasury bonds high. 

On the other hand, according to today's data, the CPI in the U.S. advanced by 0.1% in July after staying steady in June while the core CPI, which strips out the volatile food and energy prices, also rose 0.1%. Commenting on the data, "today's report doesn't fundamentally change the 'wait-and-see' approach at the Fed, who expect some additional soft prints before a projected rebound," TD Securities told Reuters in a research note.

After sliding to a fresh 6-week low at 2.182%, the 10-year T-bond yield recovered moderately and is now at 2.194%, losing 0.75% on the day. The 2-year reference is at 1.298%, down 2.75%, while the 30-year reference is virtually unchanged at 2.793%.

 

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