Markets Anticipate Inflation and Retail Sales Reports

  • Treasury yields rise ahead of key economic updates
  • Investors prepare for inflation and retail sales data this week
  • Yield on the 2-year Treasury up 2.1 basis points to 4.084%
  • Yield on the 10-year Treasury up 1.2 basis points to 3.958%
  • Yield on the 30-year Treasury dips 1.2 basis points to 4.214%
  • Investors initially priced in a 50 basis point cut, now at 25 basis point cut more likely

Benchmark bond yields increased as investors prepared for a week of crucial U.S. economic updates, including July producer prices, July consumer prices, retail sales for July, and weekly jobless benefit claims reports. The yield on the 2-year Treasury rose to 4.084%, the 10-year Treasury to 3.958%, and the 30-year Treasury dipped slightly to 4.214%. Initially, markets priced in an 85% probability of a 50 basis point cut in interest rates after the Fed’s September 18th meeting due to U.S. recession concerns. However, better-than-expected data and stock rally reduced this likelihood to 46.5%, now suggesting a 25 basis point cut is more probable. Société Générale’s U.S. chief economist Stephen Gallagher believes that rate cuts in response to equity pullbacks would reinforce the ‘Fed put’ perception.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about bond yields and upcoming economic updates. It also includes expert opinions from a U.S. chief economist at Société Générale, making it informative and relevant to the topic.
Noise Level: 3
Noise Justification: The article provides relevant information about bond yields and upcoming economic updates, but it lacks in-depth analysis or actionable insights. It mainly reports on market movements without offering much context or explanation for the changes.
Public Companies: Société Générale (GLE)
Key People: Stephen Gallagher (U.S. chief economist at Société Générale)

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Financial Relevance: Yes
Financial Markets Impacted: U.S. Treasury bond yields and interest rate expectations
Financial Rating Justification: The article discusses changes in benchmark bond yields, U.S. economic updates, and their impact on interest rate cut probabilities, which are all financial topics that affect financial markets and companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the article
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Small
Affected Instruments: Bonds

Reported publicly: www.marketwatch.com