U.S. Treasury yields held steady overnight, as bond market investors await key import price and retail sales data.
The 2-year Treasury yield was flat at 3.73%. The benchmark 10-year note yield also remained in place at 4.29%.
Investors will be looking out for key data such as the import price index and retail sales figures, expected at 8.30 a.m. ET.
The import price data is expected to give investors clues about the proportion of tariffs that is absorbed by foreign companies, while retail sales data will reveal how consumers are reacting to tax changes and tariffs.
Data on U.S. industrial production and consumer sentiment is also due to come in at 9.15 a.m. ET and 10 a.m. ET, respectively.
The print deluge is expected after the producer price index, a measure of wholesale U.S. inflation, climbed by a far larger-than-expected 0.9% in July on a month-over-month basis on Thursday. Economists polled by Dow Jones had expected PPI to increase 0.2% month over month.
That report throws cold water on another inflation report that came out earlier in the week indicating some softening in consumer prices. The July consumer price index had eased concerns that tariffs may be causing prices to increase rapidly.
Despite the higher inflation number, Fed funds futures were still pricing in about 93% odds of an interest rate cut in September, according to the CME’s FedWatch Tool, slightly lower than during the previous session. The futures, however, did remove any chance of a half-point cut.
Those inflation readings come ahead of the Fed’s annual gathering of the world’s central bankers in Jackson Hole, Wyoming, next week, sponsored by the Kansas City Fed, which will influence future monetary policy decisions.
— CNBC’s Lisa Kailai Han and Sawdah Bhaimiya contributed reporting.