On Wednesday, U.S. Treasury bonds saw a dip, continuing the downward trend noted over the past two days. Bonds witnessed a price drop early in the day, remaining largely negative throughout most of the session. Consequently, the yield on the benchmark ten-year note rose by 3.7 basis points to 4.192 percent. This is due to the inverse relationship between bond price and yield.
This marked the third consecutive session where the ten-year yield closed higher, rebounding from last Friday's one-month closing low. The market was influenced by uncertainties over the future of interest rates, as the financial sector braces for upcoming key U.S. economic data releases.
Although Tuesday's consumer price inflation figures were largely on par with predictions, the slightly slower than anticipated slowdown in core price growth further diminished the odds for an interest rate cut in May.
On Thursday, the Labor Department plans to release its report on producer price inflation for February, which could shed more light on the potential path for interest rates moving forward. Expectations are for producer prices to have risen by 0.3 percent in February, consistent with the increase witnessed in January. Meanwhile, the annual rate of producer price growth is predicted to accelerate to 1.1 percent, up from 0.9 percent.
Other data releases scheduled for Thursday include weekly jobless claims and retail sales, with the latter expected to show a rebound in February after a slump in January.
Friday's trading could be influenced by reports on import and export prices, industrial production, and consumer sentiment. Particularly, the University of Michigan's preliminary report on March consumer sentiment could be closely watched for its inflation expectations reading.
Though Thursday's focus may be on producer price inflation data, reactions to both jobless claims and retail sales data could also have significant effects on market movement.
