U.S. Treasury yields declined on Thursday as investors awaited key economic data points that could inform Federal Reserve monetary policy.
At 4:00 a.m. ET, the yield on the 10-year Treasury was down by over five basis points to 4.2349%. The 2-year Treasury yield was last more than five basis points lower to 4.3585%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors awaited key data as they considered the state of the U.S. economy and the outlook for interest rates.
Data released Wednesday from the manufacturing sector for July came in below expectations, with the U.S. PMI flash manufacturing output index falling to 49.5 as new orders, production and inventories fell. Economists had forecast the figure to come in at 51.5.
Readings below 50 indicate a contraction, while those above 50 reflect growth.
On Thursday, investors will be following durable goods orders, weekly initial jobless claims and a preliminary reading of second-quarter U.S. gross domestic product.
The data will provide more hints about the state of the economy and comes ahead of key inflation figures due Friday in form of the personal consumption expenditures price index. This is the Fed’s preferred inflation measure and could therefore affect the central bank’s decision-making and guidance issued about monetary policy when it meets next week.
Markets are widely expecting interest rates to remain unchanged then, but are hoping to gain hints about what the path ahead for rates could look like, including when cuts may begin and how many there could be this year.
