T-bill yields beat key inflation data

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US Treasury yields fell early Friday, ahead of the release of key inflation data later in the morning.

The benchmark 10-year Treasury bill yield fell 3 basis points to 1.4944% at 4:20 am ET. The yield on 30-year Treasuries also fell 3 basis points to 2.056%. Yields move in the opposite direction of prices and 1 basis point equals 0.01%.

The 10-year rate peaked at 1.56% earlier in the week, its highest level since June, amid investor concerns over continued inflation and tighter monetary policy.

The August Basic Personal Consumption Expenditure Price Index, the measure of inflation the Federal Reserve uses to guide its policy agenda, is due for release Friday at 8:30 a.m. ET. Economists polled by Dow Jones forecast the core CPI to rise 0.2% in August and 3.5% year-on-year.

Geoffrey Yu, senior market strategist at BNY Mellon, told CNBC’s “Squawk Box Europe” on Friday that the United States may be in a “slightly better position” than other countries when it comes to rising prices. He explained that the producer price index and the CPI were high in the United States, which meant that companies could pass some of this price pressure on to the underlying consumer.

By comparison, China’s PPI was “very problematic” but the CPI “barely reached 1%,” Yu said, putting more pressure on corporate margins and profits.

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Personal income and spending data for August is also expected to be released at 8:30 a.m. ET.

Markit’s final Manufacturing Purchasing Managers Index for September is expected to be released at 9.45 a.m. ET, while ISM’s manufacturing PMI for last month is due at 10 a.m. ET.

Additionally, US construction spending data for August is expected to be released at 10 a.m. ET.

Meanwhile, Congress was set to prevent a government shutdown on Thursday. Both the Senate and the House passed a short-term appropriation bill that would allow the government to run until December 3 and sent it to President Joe Biden for him to sign.

No auction is scheduled for Friday.

CNBC’s Yun Li contributed to this market report.


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