Most Treasury yields trend lower after manufacturing, consumer-sentiment data

Treasurys rallied Friday morning, turning most yields lower, following a mixed batch of U.S. data on manufacturing.

What’s happening

  • The yield on the 2-year Treasury
    was 4.583%, down 6.1 basis points from 4.644% on Thursday. Yields move in the opposite direction to prices.

  • The yield on the 10-year Treasury
    was 4.236%, down 1.5 basis points from 4.251% on Thursday.

  • The yield on the 30-year Treasury
    was 4.378%, up less than 1 basis point from 4.375% on Thursday.

  • For all of February, 2- and 10-year rates had jumped by 41.7 basis points and 28.6 basis points, respectively — the largest monthly gains since last June and October.

What’s driving markets

Friday’s data releases brought a pair of mixed reports on manufacturing.
The Institute for Supply Management’s manufacturing index showed that activity contracted in February for a 16th straight month.

But the final reading of S&P Global’s manufacturing purchasing managers’ index inched up to 52.2 in February versus an initial reading of 51.5, signaling a quicker pace of improvement in that sector.

Separately, consumer sentiment moved sideways in February, slipping from levels seen in January but holding on to gains seen over the past three months, according to the University of Michigan.

Treasury yields had ended February with their biggest monthly gains since 2023, following a series of data that pointed to continued persistent inflation. On Thursday, the Fed’s preferred inflation measure, known as the PCE index, was in line with expectations for January, but still hot.

Read: ‘The Fed will not cut rates this year,’ says Wall Street economist

A number of Fed officials are due to speak on Friday, including governors Chris Waller and Adriana Kugler, Dallas Fed President Lorie Logan, Atlanta Fed President Raphael Bostic, and San Francisco Fed President Mary Daly.

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