Treasuries plunge as retail sales peak in June

Tuesday, 16. July 2019 15:14

The slump in import and export price inflation last month, registered in the statistical update on Tuesday by the United States Department of Labor, was eclipsed by surprisingly strong numbers on retail sales. The country's debt securities tumbled, sending yields sharply higher, while British and German benchmark counterparts surrendered earlier gains in price. Bond values move inversely to yields. The readings weakened confidence in the Federal Reserve's intention to lower interest rates.

Core retail volumes, which exclude cars, surged 0.4%, the same as in May but against a downward revision. The so-called control group showed a spike of 0.7% on top of an improved 0.6% result for the previous month. Import prices dropped 2% year on year as the fall accelerated by 0.5 percentage points. The rate for export merchandise landed at 1.6% below zero, doubling from May.

The two-year Treasury note yield jumped 4.1 basis points to 1.874% at 9:13 am ET. The 10-year gauge surged 4.1 points to 2.133% and the 30-year yield advanced 3.9 points to 2.65%. Corresponding futures declined 0.08%, 0.31% and 0.57%, respectively.

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