Treasury yields fall after retail sales miss expectations

U.S. Treasury yields saw a decline on Tuesday following a disappointing retail sales report.

The 10-year Treasury yield dropped by more than 5 basis points to 4.145%, while the 30-year Treasury yield fell by over 6 basis points to 4.787%. The 2-year Treasury note yield also decreased by more than 3 basis points to 3.452%.

A basis point represents 0.01%, with yields and prices moving in opposite directions.

Yields took a hit after December’s retail sales remained flat month-on-month, falling short of the Dow Jones forecast for a 0.4% increase. This lackluster performance followed a 0.6% rise in November, adjusted for seasonality but not inflation.

“Despite a booming stock market, consumer sentiment appears to be wavering,” noted Todd Schoenberger, chief investment officer at CrossCheck Management. “The economic landscape is fragile, and today’s data underscores the financial strain consumers are facing.”

Investors are now eagerly awaiting a backlog of data that was delayed due to the recent U.S. government shutdown. The upcoming January nonfarm payrolls report, rescheduled for Wednesday, is of particular interest.

Additionally, attention will be on the January consumer price data set to release on Friday, with forecasts indicating a slight decrease in annual inflation to 2.5%.

Thursday will see the release of data on weekly initial jobless claims, providing further insights into the state of the labor market.

Meanwhile, market watchers are closely monitoring developments in China, with reports suggesting that authorities are advising banks to reduce exposure to U.S. Treasurys due to concerns about risk concentration and volatility.