Treasury yields rise as Wall Street awaits key employment data

U.S. Treasury yields edged higher on Thursday as Wall Street awaits key employment data due later in the session. 

The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose over 2 basis points to 4.573%.

The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, rose over 2 basis points to 4.158%. The longer-dated 30-year Treasury bond yield also added 2 basis points to 5.107%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Investors will be monitoring retail sales data and jobless claims at 8:30 a.m. ET for further signs on the health of the U.S. economy.

Bond markets were given a disinflationary boost on Wednesday after the produce price index dropped 0.3% in June, a softer reading than anticipated. Economists polled by Dow Jones expected the measure to be unchanged on the month. Yields fell a handful of basis points across the board upon the news.

As with consumer prices, the index benefited from easing energy costs, particularly as oil fell due to the brief pause in tensions between the U.S. and Iran. Goods prices posted a 1.4% monthly decline, the biggest drop since July 2022 as energy slumped 6.4% and final demand food prices were off 0.6%. 

"The Fed's war with inflation isn't over by any means, as Fed Chair Warsh made plain in yesterday's testimony, but there is good news from the front and the odds of Fed rate hikes should continue to recede as inflation at the factory level is trending lower, and producers will not be passing on their higher costs to the consumer level as much as we previously thought," said Chris Rupkey, chief economist at FWDBONDS.

— CNBC's Jeff Cox and Sean Conlon also contributed to this report.