14.01.2025 21:21:20

Treasuries Close Modestly Higher As Producer Prices Rise Less Than Expected

(RTTNews) - After moving to the upside early in the session, treasuries showed a lack of direction over the course of the trading day on Tuesday.

Bond prices spent the day bouncing back and forth across the unchanged line before eventually closing modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.5 basis points to 4.788 percent.

With the slight decrease on the day, the ten-year yield gave back ground after reaching its highest closing level in over a year on Monday.

The modestly higher close by treasuries came following the release of a Labor Department report showing producer prices rose by slightly less than expected in the month of December.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in December after climbing by 0.4 percent in November. Economists had expected producer prices to rise by 0.3 percent.

Meanwhile, the report said the annual rate of producer price growth accelerated to 3.3 percent in December from 3.0 percent in November. The acceleration matched economist estimates.

The smaller than expected monthly increase by producer prices helped ease recent concerns about the outlook for inflation and interest rates, although the faster annual growth kept buying interest somewhat subdued.

Traders may also have been reluctant to make more significant moves ahead of the release of a more closely watched report on consumer price inflation on Wednesday.

Economists currently expect consumer prices to rise by 0.3 percent in December, matching the increase seen in November. The annual rate of growth is expected to accelerate to 2.9 percent from 2.7 percent.

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