U.S. Treasury yields were mixed early on Thursday, as investors looked ahead to the release of inflation data later in the morning.
The yield on the benchmark 10-year Treasury note fell 2 basis points to 1.944% at 7 a.m. ET. The yield on the 30-year Treasury bond saw little movement and stood at 2.33%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
February’s consumer price index is due to come out at 8:30 a.m. ET. Economists expect headline inflation to have risen 0.7% last month, or 7.8% from the year prior, according to Dow Jones estimates.
Investors will be poring over the inflation data, given concerns around the recent spike in commodity prices because of the Russia-Ukraine war. The fear has been that higher commodity prices could push headline inflation higher, while slowing economic growth, also known as “stagflation.”
However, commodities, including oil, silver and wheat did pull back on Wednesday. The drop in oil prices came amid indications of possible progress by the U.S. in encouraging more oil production from other sources. This comes following announcements of sanctions on Russian oil imports, in response to its invasion of Ukraine.
Russia and Ukraine’s foreign ministers are meeting for talks in Turkey on Thursday, with hopes that a peace deal for Ukraine could be in sight.
Anu Gaggar, global investment strategist for Commonwealth Financial Network, said on Wednesday that she believed while the CPI print would shed light on the impact of higher energy prices on inflation, this would “only reinforce the robust Fed tightening cycle.”
“Even if a deal is magically achieved tomorrow, it is unlikely for the sanctions to be lifted in a hurry, which means that prices of fossil fuels could remain higher for longer,” she said.
In addition to inflation data, the number of jobless claims filed during the week ended March 5 is set to be released at 8:30 a.m. ET on Thursday.
Auctions are scheduled to be held on Thursday for $45 billion of 4-week bills, $35 billion of 8-week bills and $20 billion of 30-year bonds.
— CNBC’s Hannah Miao, Yun Li and Holly Ellyatt contributed to this market report.
