U.S. Treasury yields were lower on Wednesday as investors awaited retail sales data and remained concerned after an aggressive bond-market sell-off last week.
At 4:37 a.m. ET, the benchmark 10-year Treasury yield fell less than a basis point to 4.315%. The 2-year Treasury yield also fell by less than 1 basis point to 3.821%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are anticipating the release of retail sales data for March, due to be published by the U.S. Census Bureau at 8:30 a.m. ET. It’s a key report that will indicate consumer confidence at a time of heightened uncertainty regarding the economy and inflation.
Economists polled by Dow Jones are forecasting a 1.2% increase from the previous month, up from a 0.2% rise in February.
Investors will also look to industrial production data and monitor a speech by Federal Reserve Chairman Jerome Powell later in the day.
Treasury yields have declined three days in a row, providing some relief after a week of volatility in the bond market, with the 10-year Treasury jumping more than 50 basis points last week as the tariff trade war between the U.S. and China intensified.
The bond market sell-off has raised questions about who is unloading U.S. Treasurys, with speculation surrounding China as the country is America’s largest foreign creditor after Japan, holding roughly $760 billion in Treasury securities. Other suspects include Japanese life insurers and hedge funds.
“I think China is actually weaponizing the Treasury holding already,” said Chen Zhao, chief global strategist at Alpine Macro. “They sell U.S. Treasurys and convert the proceeds into Euros or German bunds.”
