BOND REPORT: Treasury Yields Tick Higher Ahead Of Data

By FeaturesDow Jones Newswires

Treasury prices weakened Wednesday, pushing up yields, as investors awaited data on industrial production and capacity utilization, as well as the Federal Reserve's latest roundup of economic anecdotes.

What are yields doing?

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The yield on the benchmark 10-year U.S. Treasury note rose 2.3 basis points to 2.560%, while the yield on the 2-year note picked up 1.7 basis points to 2.035%. Yields and Treasury prices move in opposite directions.

What's driving the market?

The focus remains on the Fed, with the 2-year yield, the most sensitive to interest-rate expectations, last week topping 2% for the first time since 2008 on growing anticipation the central bank will deliver a series of rate increases this year.

The economic calendar is light, but Wednesday does feature the Fed's so-called beige book, a roundup of economic anecdotes gathered by regional Fed banks. Worries remain over the potential for a government shutdown at the end of the week unless lawmakers and the White House come to an agreement.

What are analysts saying?

"U.S. industrial production data will presumably be the standout release as far as the market is concerned today," said Steven Barrow, currency and fixed-income strategist at Standard Bank, in a note.

What's on the economic calendar?

Data on December industrial production and capacity utilization are due at 9:15 a.m. Eastern. Economists polled by MarketWatch produced a median forecast for a 0.6% rise in production, up form 0.2% in December. Utilization is forecast to come in at 77.5%, up from 77.1% a month earlier.

A January home builder's index is due at 10 a.m. Eastern, while the beige book report is set for release at 2 p.m.

What other assets are in focus?

The 10-year German bond yield , often used as a proxy for the broader eurozone economy, was at 0.555%, compared with 0.590% in the prior session.

(END) Dow Jones Newswires

January 17, 2018 08:41 ET (13:41 GMT)

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