Treasury yields slip on United States inflation data, stocks up

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A key gauge of the USA dollar's performance steadied Friday before the release of figures on consumer price inflation, which have been in focus as the Federal Reserve has signaled its intent to raise interest rates again this year.

The dollar steadied in early Asian trading on Friday, on track for weekly losses as investors awaited the USA inflation data to gauge the likelihood that the Federal Reserve will stick to its plan to raise interest rates again this year.

While investors cheered an increase in the USA producer price index (PPI) for last month, inflation concerns were still in focus ahead of consumer price index (CPI) data on Friday after Federal Reserve minutes showed a more guarded view.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.22 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.24 percent.

"PPI was a little bit better, but that doesn't really translate well to CPI", said Gennadiy Goldberg, an interest rate strategist at TD Securities in NY.

Core inflation rose to 2.3 percent in September from 2.2 percent in August.

Also in currencies, the euro was down 0.15 percent to $1.1839 snapping four straight days of gains after rising to its highest since September 25 earlier in the session. Sterling was last trading at $1.3261, up 0.30 percent on the day.

"While a December rate hike had seemed a strong probability after last Friday's solid wage growth data, the picture now looks much more finely balanced", said John Dolan, senior dealer at FEXCO Corporate Payments.


The Dow Jones Industrial Average fell 31.88 points, or 0.14 percent, to end at 22,841.01, the S&P 500 lost 4.31 points, or 0.17 percent, to 2,550.93 and the Nasdaq Composite dropped 12.04 points, or 0.18 percent, to 6,591.51.

Benchmark 10-year U.S. Treasury notes rose 13/32 in price to yield 2.2766 percent, from 2.323 percent late on Thursday.

Meanwhile, the monthly rise in vehicle sales was 3.6% in September, with unit sales reaching a 12-year high, and sales of building materials and garden equipment were up 2.1% on the month.

Sterling last traded at $1.3273, up 0.39 percent on the day.

The U.S. dollar index .DXY was flat, with the euro down 0.05 percent to $1.1823.

Policymakers could, however, find solace from another report indicating that the USA economy was swiftly recovering from the damage inflicted by Hurricanes Harvey and Irma, with a strong rebound in retail sales last month.

December gold settled at USD1,304.60/oz, up USD8.10, or 0.6%.

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