Bonds

10-year Treasury yield hits 5-week high after strong retail sales data

Hakyung Kim@hakyungkim_
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Matt Clinch
WATCH LIVE
Key Points
  • Treasury yields rose Wednesday, with the 10-year yield hovering near 4.1%.
  • The yield on the 10-year Treasury note was last up 5 basis points at 4.113%, after trading as high as 4.12%, the highest level since Dec. 13.

In this article

Treasury yields rose Wednesday, with the 10-year yield hovering near 4.1% as investors focused on stronger-than-expected December retail sales and the latest remarks from Federal Reserve members.

The yield on the 10-year Treasury note was last up nearly 4 basis points at 4.102%, after trading as high as 4.12%, the highest level since Dec. 13. The 2-year Treasury yield rose around 12 basis points to trade at 4.352%.

The 20-year Treasury inched up 2 basis points to 4.442%. This came after a weak auction of $13 billion 20-year bonds at a high yield of 4.423%. The bid-to-cover ratio, a measure of demand, on the 20-year Treasury was 2.53.

Yields and prices move in opposite directions. One basis point equals 0.01%.

Treasurys


December's retail sales data indicated strong consumer demand at the holidays. Retail sales increased 0.6% for the month, above economists' estimates of 0.4%, as compiled by Dow Jones. Excluding autos, sales rose 0.4%, which also topped a 0.2% estimate.

On Tuesday, yields jumped after comments from Federal Reserve Governor Christopher Waller, who suggested that while the central bank will likely cut rates this year, it may take its time.

At the World Economic Forum in Davos, Switzerland, more European Central Bank members indicated that markets were getting ahead of themselves on rate cut projections.

The president of the Dutch central bank, Klaas Knot, told CNBC on Wednesday that the eurozone's central bank looked at overall financial conditions, and that "the more easing the market has already done for us, the less likely we will cut rates." Knot was referring to the fact that higher stock and bond prices in the fourth quarter of last year acted as the equivalent of easier interest rate policy, while lower prices act as the equivalent of tighter policy.

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