NEW YORK: US Treasury yields rose on Friday after data showed that US consumer prices rose for a second straight month in March, erasing an earlier fall when German government debt yields plunged to new lows.
US consumer prices rose in March as the cost of gasoline and shelter increased. The Labor Department said on Friday its Consumer Price Index increased 0.2 percent last month after a similar gain in February.
"The market was up overnight following bonds in Europe and bunds making new lows again," said Dan Mulholland, head of Treasuries trading at Credit Agricole in New York. After CPI, "it was unable to hold gains. It wasn't a soft number to make the market rally."
Benchmark 10-year notes were last down 5/32 in price to yield 1.91 percent, up from a low of 1.85 percent in overnight trading.
A string of disappointing data including March's employment report has boosted Treasuries in recent weeks as many investors push back expectations on when they expect the Federal Reserve to begin raising interest rates to September, or later.
Low inflation continues to pose a challenge to the US central bank and Friday's consumer price data wasn't strong enough to indicate that inflation may be on the upswing.
"It's somewhat mixed, it doesn't really give us any indication that inflation is going to accelerate anytime soon," said Thomas Simons, a money market economist at Jefferies in New York.
Concerns about Greece helped Treasuries rally overnight. Greece on Thursday sounded a mix of defiance and willingness to compromise with its international creditors on reforms required to unlock more loans, as it faces running out of money ahead of debt repayments next month.
German 10-year government debt yields dropped to 0.049 percent on Friday and many expect the bonds will soon trade at negative yields.
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