The Treasury market was flat on Friday, as the market digested positive economic data while still feeling a hangover from Thursday’s price rally that resulted in the largest one-day decline in the 10-year Treasury yield since March 18.
Bond prices move in the opposite direction of yields.
News that the producer-price index recorded its largest increase since September 2012 sparked some bond selling on Friday. The report added to a recent flurry of data that suggest that the U.S. economy is finally coming out of its first-quarter slump, ahead of the Federal Reserve’s meeting next week.
But the market’s reaction to Friday’s data was somewhat muted as the Treasury market is still driven by moves in the eurozone, particularly as the Greek debt saga continues to weigh on bonds.
Since the data-dependent Fed has signaled that it will base the decision to raise rates on two pillars — employment and inflation — Friday’s PPI report provided more cause for the Fed to hike rates for the first time in nearly a decade.
Read the full article at MarketWatch.com
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