The benchmark 10-year Treasury yield fell on Friday as markets adjusted for the Federal Reserve’s interest rate hike and attention turned to preliminary September PMI (Purchasing Managers’ Index) data. to be published later that same day.
The 10-year Treasury note last traded at 3.6946%, down 1 basis point at 4:12 am ET. It had hit a high in more than 11 years 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 on the back of the Federal Reserve’s interest rate hike. On Thursday, it shot up to 4.163%, a level not seen since October 2007.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Preliminary PMI data for September is due out on Friday, giving markets a preliminary view of the economic state of the manufacturing and services industries for the month. PMI data is used as a key indicator of inflation and recession concerns, as it reflects 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, growth in the manufacturing industry is expected to fall, after slowing to near 2020 levels last month.
Markets are also digesting the Federal Reserve’s 75 basis point interest rate hike that was announced on Wednesday as the central bank tries to curb inflation. Federal Reserve Chairman Jerome Powell will give a more informative speech on Friday.