The benchmark 10-year Treasury yield fell on Friday as markets adjusted to higher Federal Reserve interest rates and attention turned to flash Purchasing Managers’ Index (PMI) data. ) for September which are expected to be released later today.
The 10-year Treasury note last traded at 3.6946%, down 1 basis point at 4:12 a.m. ET. It had hit a more than 11-year high on Thursday, topping 3.71% after gaining nearly 20 basis points.
The policy-sensitive 2-year Treasury continued to hover around 4.1% after rising following the Federal Reserve’s interest rate hike. By Thursday, it had climbed to 4.163% – a level not seen since October 2007.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Flash PMI data for September is due out on Friday, giving markets a preliminary look at the economic situation in manufacturing and services industries for the month. PMI data is used as a key indicator of inflation and recession concerns, as it indicates whether industries are growing or contracting, as well as supply and demand.
Analysts expect the services sector to edge up after contracting sharply in August. Meanwhile, manufacturing growth is expected to slow, after slowing near 2020 levels last month.
Markets are also digesting the Federal Reserve’s 75 basis point interest rate hike announced on Wednesday as the central bank attempts to rein in inflation. Federal Reserve Chairman Jerome Powell is expected to deliver a speech with additional information on Friday.