Treasury yields end at 2-week lows ahead of Friday's inflation data

By Vivien Lou Chen

Yields on U.S. government debt finished slightly lower on Wednesday, with traders wary of taking bold positions ahead of Friday's PCE inflation data.

What happened

The yield on the 2-year Treasury BX:TMUBMUSD02Y slipped 2.9 basis points to 4.568%, from 4.597% on Tuesday. The yield on the 10-year Treasury BX:TMUBMUSD10Y fell 3.8 basis points to 4.195%, from 4.233% on Tuesday.The yield on the 30-year Treasury BX:TMUBMUSD30Y declined 4.1 basis points to 4.358%, from 4.399% on Tuesday. Wednesday's levels are the lowest for the 2-, 10- and 30-year rates since March 11-13.

What drove markets

Treasury yields have held steady this week as traders avoided taking strong positions ahead of this week's inflation update.February data on the personal-consumption expenditures price index, the Federal Reserve's favored inflation gauge, is scheduled to be released on Friday, when markets will be closed for the Good Friday holiday. The Treasury market closes earlier-than-usual on Thursday.

There was no major U.S. economic data on Wednesday. Treasury's $43 billion auction of 7-year notes was met with strong demand, according to BMO Capital Markets strategist Vail Hartman. Fed Governor Christopher Waller is set to make comments on the economic outlook at 6 p.m. Eastern time.

What strategists are saying

"The Treasury market is heading into the month- and quarter-end with little to trade on since last week's Fed meeting," said Will Compernolle, macro strategist at FHN Financial in New York. "Tomorrow's shortened session could leave traders with GDP revisions that tweak the Q4 inflation narrative," he wrote in a note. "Otherwise, investors are left to close out their monthly and quarterly positions without seeing Friday's holiday-released PCE data," considering the bond market will be closed for Good Friday.

-Vivien Lou Chen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-27-24 1535ET

Copyright (c) 2024 Dow Jones & Company, Inc.