US Treasury yields rise as Oil strength offsets weak Retail Sales
US Treasury yields advanced on Friday during the North American session after reversing their course following the release of US Retail Sales data, which disappointed investors. Meanwhile, the lack of news from the Middle East kept Oill prices higher, amid fears of a resumption of hostilities.
US yields climb as Oil stays bid, while weak sales pressure Dollar
The US 10-year Treasury yield edged up by over 4 basis points to 4.692% amid a rise in Oil prices. West Texas Intermediate (WTI), the US crude benchmark, is up 1.50% at $82.39.
US Retail Sales disappointed investors, contracting -0.6% MoM, below forecasts of 0.1% growth and June’s 0.2%. The decline was spurred by a contraction in online sales, as Amazon moved its Prime Day from July to June. Also, gasoline prices fell.
Later, the University of Michigan Consumer Sentiment index fell from 55.2 to 51.0 in August, showing waning consumer sentiment, while inflation expectations stayed stable.
The US 2-year T-note yield, the most sensitive to interest rate expectations, fell. Before recovering some ground, rising two basis points at 4.17%. So far, money markets have priced in a 63% chance of a rate hike by the Fed at the December 2026 meeting.
The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, tumbled over 0.31% at 99.63, and for the week is poised to end almost flat.
The US docket will include housing data, the ADP Employment Change 4-week average, the jobless claims, and Flash PMIs.
US 10-year Treasury yield chart
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