US 2-yr T-yield snaps 6-day winning streak

The yield on the 2-year Treasury note ended the six-day winning streak on Thursday as the losses in the equity markets overshadowed the strong producer price inflation (PPI) data.

The yield clocked a high of 1.367% before falling to 1.339% on Thursday. Bonds gained, pushing the yields lower as the weak retail sector earnings weighed over the S&P 500 index.

The risk-off trading overshadowed the April’s producer-price index (PPI), which printed at 2.5% y/y. It has been the largest gain since February 2012. The uptick in the inflation adds credence to the argument that inflation is closing-in on the Fed’s target of 2%.

The yield currently trades around 1.339% and may revisit yesterday’s high of 1.367% if the US CPI data due today shows an uptick in the price pressures.