U.S. Treasury yields edged upward on Thursday, November 12, as the bond market reopened following the Veterans Day closure. Investors were awaiting inflation and housing reports scheduled for the remainder of the week, looking for further indications of economic conditions and the Federal Reserve's next interest rate decision.
The yield on the benchmark 10-year Treasury note increased by 2 basis points to 5.0100%. That yield serves as a reference for borrowing costs associated with mortgages, auto loans and credit card debt. Its rise came as traders returned to the market ahead of the upcoming U.S. economic releases.
The 2-year Treasury yield climbed more sharply, gaining 5 basis points to reach 4.7800%. That maturity is particularly sensitive to the Federal Reserve's short-term interest rate decisions. Meanwhile, the yield on the longer-dated 30-year Treasury held at 5.3503%. Geopolitical developments often influence movements in that longer maturity.
The moves left the 2-year and 10-year yields higher while the 30-year yield remained unchanged. Bond prices move in the opposite direction to yields. A basis point represents one-hundredth of a percentage point, the unit used to describe the changes in Treasury yields.
Attention was turning to Friday's monthly producer price inflation report, which measures inflation at the wholesale level. The October reading is expected to show an increase of 0.4%, compared with September's 1.3% surge. The forecast points to a smaller monthly rise, with the release set to provide another indication of price pressures in the U.S. economy.
Before those inflation figures arrive, investors will receive the National Association of Realtors' October home sales report, due later Thursday. Existing home sales increased 1.5% in September to 3.99 million, recovering from a two-year low recorded in the preceding month.
Trading Economics estimates put October existing home sales at 4 million. The housing figures and the wholesale inflation release are among the domestic reports traders are watching this week as they assess the economic picture and look for clues about the Fed's next move.
Oil prices showed little overall movement in early trading as negotiations in the Middle East remained deadlocked. U.S. West Texas Intermediate futures gained less than 0.1% to trade at $86.59 a barrel. Brent crude was up 0.17%, reaching $92.92 a barrel.
