US Treasury Yields Retreat as Economic Data and Oil Prices Fluctuate
US Treasury yields retreated from their recent highs on Wednesday after the release of economic data, as investors assessed the latest information and crude prices fluctuated.
The ADP National Employment Report showed private employment rose by 38,000 jobs last month, below the expected 48,000 increase. The report also revealed that July's job growth was revised upward to 46,000. Federal Reserve Bank of New York President John Williams attributed rising long-term bond yields to a solid economy rather than inflation fears.
Oil prices initially fell by about 1%, but then rebounded and rose over 1% as concerns over supply due to the ongoing Iran war outweighed comments from US Energy Secretary Chris Wright. The yield on the benchmark 10-year Treasury note dropped 0.2 basis points to 4.794%, poised to snap its five-session winning streak.
CME FedWatch showed that expectations for a rate hike of at least 25 basis points at the September meeting stood at 64.2%. Thomas Urano, co-chief investment officer at Sage Advisory, expressed his concerns about policy becoming increasingly difficult due to conflicting data on inflation and employment.