U.S. Treasury futures fell sharply to intraday lows after U.S. retail sales data beat expectations and initial jobless claims in the U.S. came in at 227,000, below the 235,000 expected.
US Retail Sales (Monthly) (July);
Disclosed: 1.0%
Expectation: 0.4%
Previous: 0.0%
US Core Retail Sales (MoM) (July);
Explained: 0.4%
Expectation: 0.1%
Previous: 0.4%
US Unemployment Claims
Explained: 227K
Estimate: 236K
Previous: 233K
Overnight index swaps (OIS) linked to the Fed meeting suggest the Fed will cut interest rates by about 29 basis points at its September meeting, compared with 32 basis points at Wednesday's close.
During the day, the US 2-year Treasury yield rose by 10 basis points to around 4.06%, then fell after the data was released. The 5-year and 30-year levels flattened by basis points and 4 basis points, respectively.
US import prices rose slightly in July, continuing a trend of moderate inflation data that supports financial market expectations that the Federal Reserve will cut interest rates next month.
U.S. import prices rose 0.1 percent last month as energy costs, which had been flat in June, recovered modestly. Economists had expected import prices excluding tariffs to fall 0.1 percent.
The report increased expectations that the Fed would cut interest rates by 25 basis points in September, following the moderate increase in the CPI in July.
*This is not investment advice.