Treasuries Give Back Ground Following Recent Rally

(RTTNews) - After showing a strong move to the upside over the past several sessions, treasuries gave back some ground during trading on Tuesday.

Bond prices moved lower in morning trading and remained in negative territory throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 4.074 percent.

The ten-year closed higher for the first time in five sessions, bouncing off its lowest closing level since early April.

The pullback by treasuries came as traders cashed in on some of the recent strength in the bond markets ahead of the release of closely watched inflation data.

The Labor Department is scheduled to release reports on producer price inflation and consumer price inflation on Wednesday and Thursday, respectively.

While last Friday's weaker-than-expected jobs data increased confidence the Fed will cut interest rates at its meeting next week, the inflation data could influence how aggressively the central bank lowers rates.

Economists currently expect the annual rate of producer price growth in August to come in unchanged from July at 3.3 percent.

The annual rate of growth by consumer prices is expected to accelerate to 2.9 percent in August from 2.7 percent in July, while the annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to hold at 3.1 percent.

Ahead of the data, CME Group's FedWatch Tool is currently indicating a 91.8 percent chance the Fed will lower rates by a quarter point and a slim 8.2 percent chance of a half-point rate cut.

On the U.S. economic front, the Labor Department released data showing non-farm employment for the twelve months through March 2025 was downwardly revised by 911,000 jobs.

The producer price inflation data is likely to attract attention on Wednesday, although trading activity may be relatively subdued ahead of the release of the more closely watched consumer price inflation data on Thursday.