(Bloomberg) — Treasuries gained across the curve on Thursday, trimming this week’s sharp losses as investors waited for US growth and inflation data to shed more light on the state of the economy.
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The yield on 10-year notes slipped two basis points to 4.59% ahead of a revised reading of first-quarter gross domestic product in the day, which will likely be lower from an initial print, according to economists in a Bloomberg poll. Investors also awaited speeches by Federal Reserve officials including New York Fed President John Williams and Atlanta Fed President Raphael Bostic.
The market suffered a steep slide earlier in the week, when a triad of weak bond auctions and hawkish comments from Fed officials put bond prices under pressure. Traders now expect the Fed to cut rates just once this year and are increasingly focused on each economic data release.
“We could see a bit of consolidation and lower yields as the supply glut is behind us,” said Axel Botte, fixed income strategist at Ostrum Asset Management in Paris.
The move could be short-lived, he added. If the Fed’s preferred inflation gauge, the personal consumption expenditures index, comes in above expectations, then interest rates may have to stay higher for longer.
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