BOND REPORT: Treasury Yields Decline As Investors Await Speech From Fed's Powell
Wholesale prices in September jumped to 0.4%, pushing the annual growth rate to 2.6%, the fastest pace since 2012.
Treasury yields held on to their earlier decline on Thursday as traders braced for a speech from Fed. Gov. Jerome Powell that could swing attention back on the guessing game of who will replace Fed Chairwoman Janet Yellen.
What are yields doing?
The benchmark 10-year Treasury yield fell to 2.332% after briefly touching an intraday high from 2.346% on late Wednesday. The shorter 2-year Treasury note yield ticked lower to 1.505%, from 1.520%, while the 30-year bond yield slipped to 2.865% from 2.876%. Bond prices move in the opposite direction of yields.
What might drive markets?
With plenty of Fed officials on the docket, investors will try to glean further clues on the path of future monetary policy in the wake of the release Wednesday of the minutes from the central bank's September policy meeting. Investors speculating on who will take over from Fed Chairwoman Janet Yellen, if she is not reappointed, will eye a speech from Fed. Gov. Jerome Powell, who might use the stage to burnish his leadership credentials. According to betting markets (https://www.predictit.org/Market/3306/Who-will-be-Senate-confirmed-Fed-Chair-on-February-4%2c-2018), Powell is seen as the top candidate to replace Yellen. Treasury Secretary Steven Mnuchin is reportedly encouraging Trump to select him as Fed chief, according to Politico (http://www.politico.com/story/2017/10/11/jerome-powell-federal-reserve-chair-243679).
See: December rate hike might not be automatic, minutes of last month's meeting show (http://www.marketwatch.com/story/december-rate-hike-not-automatic-minutes-of-last-months-meeting-show-2017-10-11)
Read: Jerome Powell, in the running for top Fed spot, echoes one of Trump's economic themes (http://www.marketwatch.com/story/jerome-powell-in-the-running-for-top-fed-spot-echoes-one-of-trumps-favorite-economic-themes-2017-10-03)
Long-dated Treasurys might feel pressure from a sale of $12 billion of 30-year bonds at 1 p.m. Eastern. Auctions of government paper can often influence outstanding trading.
What are market participants saying?
"With a moderated Q&A session, we're expecting that Powell won't divulge much on his economic views (or face a question on his job prospects), but it should help make his candidacy a market focus and possibly push yields a bit higher," wrote Aaron Kohli, fixed-income strategist for BMO Capital Markets.
What economic data is on investor's radar?
Which central bankers are talking?
(END) Dow Jones Newswires
October 12, 2017 09:50 ET (13:50 GMT)