Symbolic imageUS retail sales slump as 30-year yields hit 25-year high
US retail sales fell in July by the most in more than a year, and consumer sentiment weakened in August. Long-dated US borrowing costs reached their highest level in 25 years.
Both figures reached the market on Friday, 14 August. Bloomberg reports that sentiment fell for the first time in three months. US stocks turned down after the retail data and the S&P 500 slipped back from records, while Treasuries rallied as, according to Bloomberg, the weak spending numbers eroded bets on another Fed rate rise. The Wall Street Journal reports that inflation cooled in July but remains above the Fed's target.
Washington pays 2001 rates again
At Thursday's auction of 25 billion dollars in 30-year paper the average yield was just under 5.22 percent, a level Washington last paid in 2001, Handelsblatt reports, and in trading it rose to 5.24 percent. A day earlier the government raised 42 billion dollars over ten years at just over 4.68 percent, the highest at an auction since 2007.
Third weekly gain, steeper curve
Despite Friday's decline, the S&P 500 closed the week with its third consecutive weekly gain, the Wall Street Journal reports. On Saturday it reported that the Treasury yield curve has steepened ahead of the release of Fed minutes.
Other opinions
Handelsblatt reads the same auctions as a cost problem for Washington's debt financing, while the Wall Street Journal and Bloomberg treat the yields mainly as a signal about the Fed's next step.