March 3, 2026
2-year Treasury yield ends at one-week high despite tepid June retail sales data

2-year Treasury yield ends at one-week high despite tepid June retail sales data

2-year Treasury yield ends at one-week high despite tepid June retail sales data – MarketWatch

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Bond Report

Last Updated: July 18, 2023 at 3:40 p.m. ET First Published: July 18, 2023 at 5:52 a.m. ET

[] Treasury yields finished mixed on Tuesday, with the policy-sensitive 2-year rate ending at a one-week high despite weaker-than-expected U.S. retail sales data for June.

What happened

  • The yield on the 2-year Treasury TMUBMUSD02Y, 4.772% rose 2.1 basis points to 4.753% from 4.732% on Monday. That’s the highest level since last Tuesday, based on 3 p.m. Eastern time figures from Dow Jones Market Data.
  • The yield on the 10-year Treasury TMUBMUSD10Y, 3.775% retreated less than 1 basis point to 3.788% from 3.796% Monday afternoon. The 10-year yield is down six of the past seven trading days.
  • The yield on the 30-year Treasury TMUBMUSD30Y, 3.884% fell 2.3 basis points to 3.899% from 3.922% late Monday. The 30-year yield is down five of the past six trading sessions.

What drove markets

[]The 2-year rate finished higher on Tuesday after traders concluded June’s retail sales report wasn’t soft enough to make any difference to a widely expected, quarter-of-a-percentage-point rate hike by the Federal Reserve next week.

[]U.S. retail sales rose slightly by 0.2% last month, largely as a result of a decline in spending at gas stations. Sales had been forecast to increase 0.5%, based on a Wall Street Journal poll of economists.

[]Meanwhile, June industrial production was down 0.5% for last month after a revised 0.5% decline the prior month, and capacity utilization fell to 78.9% in June versus a revised 79.4% in the prior month.

[]An indicator of home builders‘ confidence advanced for the seventh month in a row in July, fueled by a persistent shortage of previously owned homes for sale. In other data released on Tuesday, business inventories, or products waiting to be sold, rose 0.2% in May — matching economists’ forecasts.

[]Markets are pricing in a 97.3% probability that the Fed will raise interest rates by 25 basis points to a range of 5.25%-5.5% next Wednesday, according to the CME FedWatch Tool. The chance of another hike of either the same size or bigger by November was seen at 29%.

[]The central bank is expected to take its fed funds rate target back down to around 5% or lower next year.

What analysts are saying

[] “The economy is plodding along without overheating,” said  David Russell, vice president of market intelligence at TradeStation. “Americans have gotten relief at the gas pump, but also don’t have an excessive demand for consumer goods. This is modestly positive news for investors worried about the Fed needing to hike after July. Goldilocks marches on.”

Barron’s: Microsoft Looks to Extend Activision Blizzard Deal Deadline: Report

[]The tech giant wants to extend the contract for its $69 billion acquisition of the videogame company, which is due to expire on Tuesday, Reuters reported.

[]Vivien Lou Chen is a Markets Reporter for MarketWatch. You can follow her on Twitter @vivienlouchen.

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