Treasurys were little changed early Wednesday ahead of an European Central Bank meeting, and inflation data that could suggest if price pressures are percolating in the economy.
The 10-year Treasury note yield TMUBMUSD10Y, +0.11% was virtually unchanged at 2.500%. The 2-year note yield TMUBMUSD02Y, -0.17% was steady at 2.340%. The 30-year bond yield TMUBMUSD30Y, +0.04% held flat at 2.911%. Bond prices move inversely to yields.
Bond investors await the ECB to end its March meeting, with policy makers expected to offer comments on the economic outlook, and guidance on the timing of the next rate hike. Analysts also hope the ECB could provide further details on the central bank’s program offering cheap bank loans.
See: Here are 3 things Europe-wary investors will be watching for as ECB meets
Separately, the Federal Reserve will release its minutes from the March meeting at 2 p.m. Eastern time, when the central bank emphasized its dovish stance by indicating it expected no rates hikes this year through the so-called dot plot.
“The Fed had scrapped the two hikes it saw for 2019 from its projections at that meeting. The narrative surrounding this development could give some clues as to what it may take for the Fed to deviate from their current “patient” stance,” wrote Benjamin Schroeder, senior rates strategist at ING.
On late Tuesday, Fed Vice Chairman Richard Clarida said the labor market may have more slack than thought, suggesting the jobless rate may have not fallen below the so-called “full employment” level. Analysts say if the unemployment rate slips below this theoretical level, inflation pressures will start to materialize as tight labor markets spark wage increases.
In economic data, consumer prices for March will come in at 8:30 a.m. Economists surveyed by MarketWatch expect inflation to increase by 0.4% in March, but only an 0.2% rise in the core gauge stripping out for volatile food and energy prices.
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