10-year Treasury yield falls below 1.5% level despite inflation concerns
The U.S. 10-year Treasury yield fell below the 1.5% level on Wednesday, despite an anticipated rise in inflation and more data due Thursday.
The yield on the benchmark 10-year Treasury note fell 3.7 basis points to 1.491% as of 4:14 p.m. ET. The yield on the 30-year Treasury bond dropped 3.9 basis points to 2.17%. Yields move inversely to prices. One basis point is equal to 0.01%.
Dollar inches lower as focus turns to upcoming data, ECB meeting
The dollar was slightly weaker on Wednesday as investors focused on a European Central Bank meeting and the upcoming U.S. consumer price index report to gauge the current pace of the economic recovery.
Both are due Thursday, and investors have adopted a wait-and-see attitude, leaving major currencies mostly range-bound recently.
With the ECB, investors will be watching for any clues of an imminent slowdown to its bond buying program.
The Bank of Canada on Wednesday left its key interest rate unchanged as expected, and said it would maintain its current policy of quantitative easing. It also reiterated its guidance that rates would remain unchanged until at least the second half of 2022.
The Canadian dollar rose against the greenback, which fell 0.2% to C$1.2087 in the wake of the BoC announcement.
The U.S. dollar index was parked at 90.005, with the euro up 0.18% at $1.2193.
The dollar rose 0.1% against the yen to 109.61 yen, while sterling fell 0.3% to $1.4122.
The pound slid as Britain and the European Union failed to agree on solutions to post-Brexit trade problems in the British province of Northern Ireland, and exchanged threats in a standoff that could claim the G7 international summit.
While the ECB is expected to keep policy settings steady, the euro could be sensitive to changes in the bank’s economic forecasts or any signal that the pace of bond buying could be reduced in months ahead.
Investors are also watching negotiations in Washington over potential infrastructure spending, which could have an effect on the pace of U.S. growth as well. On Tuesday, President Joe Biden broke off talks on an infrastructure bill with a key Republican senator and reached out instead to a bipartisan group.
Bitcoin recovered from a three-week low it hit on Tuesday when signs of institutional investor caution and regulatory attention drove selling. It was last up 4.1% at $34.805.
Reference: CNBC
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