Treasury yields rise after two-day slide

At 5:35 a.m. ET, The yield on the benchmark 10-year Treasury note rose 3 basis points to 3.795%, while the 2-year yield climbed 6 basis points to 4.675%. Yields move inversely to prices.

At the longer end of the curve, the yield on the 30-year Treasury bond gained 2 basis points to 3.915%.

Investors were reacting on Thursday to the June producer price index, which showed a weaker-than-expected monthly rise of 0.1% on both the headline and core metrics. That followed Wednesday’s consumer price index, which came in at an annualized 3% for June, below consensus expectations and its lowest level since March 2021.

Fed officials have reiterated that the battle against inflation is far from over, and the market is broadly pricing in a quarter-point interest rate hike at the central bank’s next meeting later this month.

Traders will be watching for June import prices and preliminary results from the latest University of Michigan consumer sentiment report, both due Friday morning.