US 10-year yield briefly below 2% after data deluge

Bond traders at CME Group
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U.S. government debt prices rose on Friday as markets digested falling oil prices, a speech from a top Fed official and economic data.

The yield on the benchmark 10-year Treasury note briefly dipped below 2 percent and last traded at about 2.023 percent. The yield on the 30-year Treasury also fell to about 2.805 percent.

Retail sales fell 0.1 percent last month, while PPI fell 0.4 percent last month. Industrial production also slipped more than expected. Consumer sentiment and business inventories are set to come out at 10:00 a.m.

"We could have used a little better data to stabilize thing in an environment like this," said John Briggs, head of strategy at RBS. "It was a small miss in retail sales. discretionary stuff was still up. for me I want to see what Dudley has to say. Is he worried enough to change course."

In oil markets, Brent crude U.S. crude both fell at least 4 percent to below $30 per barrel. The three major U.S. stock averages all shed at least 2 percent of their value.

Symbol
Price
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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In prepared remarks Friday morning, New York Federal Reserve President William Dudley said future rate increases will depend on economic data. He noted that recent indicators have come in "on the softer side," adding that global economies pose a risk to the United States.

"It's less alarmist than I was expected. treasurys are coming off because Dudley's not as rattled as we were worried about," said Briggs. "His comment in August when market turmoil was high was that the case for a rate hike was less compelling and we were looking to see if he would repeat that tone or be more like [Fed Vice Chairman Stanley] Fischer last week. This is more like Fischer last week."

Central bank officials have forecast four Fed rate hikes this year, but economists expect about two. The first was expected in March, but expectations have fallen for that month.

Thursday saw the Treasury Department auction $13 billion in 30-year bonds at a high yield of 2.905 percent. The bid-to-cover ratio, an indicator of demand, was 2.29.

— CNBC's Patti Domm and Jacob Pramuk contributed to this report.