U.S. Treasuries fell Friday as a jump in risk appetite added drag. Retails sales data was in line with expectations while producer inflation was a little higher. European bourses and U.S. futures surged on moderate gains in Asia, after stronger-than-expected Chinese inflation data allayed growth concerns. Strong demand has boosted the Euro Stoxx 50 by 1.8%, recovering after three days of losses. The German DAX is 1.6% higher while the FTSE 100 continues to underperform. Bond prices are subsequently lower, yields higher, with the 10-year Treasury up 3 basis points to 1.778%. The UK Gilt is over 7 bps higher at 1.094% as the weaker Pound continues to heighten inflation concerns.
September retail sales were in line, up 0.6% on the headline and 0.5% for ex-autos. The September producer price index was a touch higher at 0.3% versus 0.2% expected on the headline and 0.2% ex-food and energy versus 0.1% expected. Further data due includes the August business inventories and preliminary October University of Michigan consumer sentiment out at 10 a.m.. The Treasury budget is also tentatively due at 2 p.m. ET.
Federal Reserve speakers have Boston President Eric Rosengren recently addressing the bank’s annual economic conference with Chair Janet Yellen due to give the keynote speech at 12:30 p.m. Cleveland’s Loretta Mester speaks locally at noon. Rosengren was on CNBC earlier, suggesting pretty good odds for a December rate hike.
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