WASHINGTON (dpa-AFX) - After moving sharply lower over the two previous sessions, treasuries have shown a notable move to the downside during trading on Friday.
Bond prices came under pressure early in the session and have remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, has jumped 5.3 basis points to 5.156 percent.
With the strong upward move seen over the past few sessions, the ten-year yield has reached its highest level in almost a month.
The continued weakness among treasuries comes following the release of the Labor Department's report on producer price inflation in the month of October.
While the report showed a slightly smaller-than-expected monthly increase in producer prices, the annual rate of producer price accelerated to 6.5 percent, the fastest pace of growth since November 2022.
'For equities, 6.5% producer inflation matters because companies can get squeezed from both sides,' said Chris Osmond, Chief Investment Officer for Fifth Third Wealth Advisors.
'Persistent input costs pressure margins, while higher bond yields raise the discount rate investors apply to those earnings,' he added. 'That combination puts a much higher hurdle on expensive stocks whose valuations depend on earnings far into the future.'
The report also indicates inflation is broadening beyond energy, as energy prices edged lower but food prices jumped and prices for services increased for a fifth consecutive month.
Following this week's inflation data, the Federal Reserve is widely expected to raise interest rates by at least a quarter point next month, with another quarter point rate in January seen as increasingly likely.
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