U.S. Treasury yields ebbed lower on Friday morning, as investors continued to monitor developments around the Russian invasion of Ukraine.
The yield on the benchmark 10-year Treasury note fell 3 basis points to 1.9408% at 4:20 a.m. ET. The yield on the 30-year Treasury bond moved 4 basis points lower to 2.25%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
The 10-year and 30-year Treasury yields slid more than 10% in Thursday morning trading, after Russia launched an invasion of Ukraine.
Later in the day, yields cut losses slightly, mirroring the turnaround in markets. However, U.S. stock futures fell early on Friday, with investors piling into the safe haven of government bonds, sending yields lower.
Russia is assaulting Ukraine by air, land and sea. U.S. and Western allies have condemned the attack, with President Joe Biden vowing to introduce a new wave of sanctions on Russia that would “exceed anything that’s ever been done.”
Ukrainian President Volodymyr Zelenskyy said on Friday morning that the military had stopped Russian invasion troops “in most directions” despite renewed missile attacks. The situation on the ground in Ukraine is extremely fluid, and accounts of the military situation are difficult or impossible to confirm.
Investors will also monitor economic data releases, as the conflict has pushed oil prices higher, stoking concerns that this could drive up inflation more broadly. Analysts believe this could make the outlook for Federal Reserve interest rate hikes less clear.
Elliot Hentov, head of global macro policy research at State Street Global Advisors, told CNBC’s “Squawk Box Europe” on Friday that there would be a “stagflationary impulse” from the conflict. Stagflation refers to a combination of a slowdown in economic growth and rising inflation.
He said stagflation would likely hit the neighboring countries in Europe hardest but would “fade quite a bit” by the time it hits the United States.
For this reason, Hentov said, the U.S. hiking cycle “cannot be stopped, it will be slowed down, it will be flattened, perhaps stretched out, the Fed can maybe take a little bit more time” in raising rates.
January’s personal consumption expenditures index, which is one measure of inflation, is due out at 8:30 a.m. ET on Friday.
Personal income and spending data for January is also set to be released at 8:30 a.m. ET.
January’s pending home sales data is then slated for release at 10 a.m. ET.
There are no auctions scheduled to be held on Friday.
— CNBC’s Ted Kemp contributed to this market report.