BOND REPORT: Treasury Yields Dip Ahead Of Inflation Data

By Sunny Oh Features Dow Jones Newswires

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Treasury yields fell slightly as investors looked ahead to inflation numbers that could put pressure on the Federal Reserve to back away from plans to raise rates one more time this year.

The benchmark 10-year Treasury yield fell 1 basis point to 2.337%. While the 2-year note yield lost 1.6 basis points to 1.352%. The yield on the 30-year bond, or the long bond, edged down 0.7 basis point to 2.912%. Bond prices move in the opposite direction of yields.

June retail sales and consumer-price index figures will come out at 8:30 a.m. Eastern. Shortly after, June's industrial production numbers will be released at 9:15 a.m. Then, the University of Michigan survey will provide its latest snapshot of consumer confidence at 10 a.m.

Traders will chiefly focus on the inflation figures as Fed speakers including Fed. Gov. Lael Brainard have said the deteriorating inflation trend could give them pause on a rate hike (http://www.marketwatch.com/story/dallas-feds-kaplan-becomes-third-fomc-member-to-question-need-for-more-rate-hikes-2017-07-13)this year. During her congressional testimony this week, Fed Chairwoman Janet Yellen repeated her belief (http://blogs.marketwatch.com/capitolreport/2017/07/12/live-blog-and-video-of-yellens-testimony-before-house-panel/?mod=MW_story_latest_news)that temporary factors were keeping a lid on consumer prices, but said that she would watch them "very closely." Some market participants took this as a small concession that the weakening economic data may not just be transitory.

Investors will also watch if other Fed speakers will highlight similar worries.

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Dallas Fed President Robert Kaplan, a voting member will speak on monetary policy in Mexico City at 9:30 a.m. Eastern. His appearance comes after he published an essay (http://www.marketwatch.com/story/dallas-feds-kaplan-becomes-third-fomc-member-to-question-need-for-more-rate-hikes-2017-07-13)stating concerns over the tepid inflation data. Chicago Fed President Charles Evans, also a voting member of the rate-setting Federal Open Market Committee, will post his speech originally intended for Thursday at 1 p.m. As one of the most dovish members on the panel, he is expected to mention how consumer prices may weigh on the prospect for monetary tightening.

(END) Dow Jones Newswires

July 14, 2017 08:26 ET (12:26 GMT)