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17.01.202419:08:00UTC+00Treasuries See Further Downside Following Retail Sales Data

Treasuries moved to the downside during trading on Wednesday, extending the notable decline seen in the previous session.

Bond prices came under pressure in early trading and remained in the red throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.0 basis points to 4.106 percent.

The ten-year yield added to the 11.6 basis points surge seen on Tuesday, reaching its highest closing level over a month.

The continued weakness among treasuries reflected ongoing uncertainty about the outlook for interest rates amid recent concerns the Federal Reserve won't lower rates as early as previously anticipated.

Adding to the worries the Fed will hold off on cutting rates, the Commerce Department released a report this morning showing U.S. retail sales increased by more than expected in the month of December.

The report said retail sales climbed by 0.6 percent in December after rising by 0.3 percent in November. Economists had expected retail sales to advance by 0.4 percent.

Excluding a jump in sales by motor vehicle and parts dealers, retail sales rose by 0.4 percent in December after inching up by 0.2 percent in November. Ex-auto sales were expected to edge up by another 0.2 percent.

"As long as the primary indicators of economic activity like personal spending and the labor market are showing no signs of weakness, the Fed will be comfortable extending its rate pause through the March FOMC decision at least," said FHN Financial Macro Strategist Will Compernolle.

A separate report released by the Federal Reserve showed an unexpected uptick in U.S. industrial production in the month of December.

The Fed said industrial production inched up by 0.1 percent in December, while revised data showed production was unchanged in November.

Economists had expected industrial production to come in unchanged compared to the 0.2 percent increase originally reported for the previous month.

Trading on Thursday may be impacted by reaction to another batch of U.S. economic data, including reports on jobless claims, housing starts and Philadelphia-area manufacturing activity.



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