Treasury yields nudge up as investors look ahead to key inflation data

U.S. Treasury yields were flat to slightly higher at the start of the week as investors look ahead to a busy week of economic data, with particular focus on a key inflation reading.

At 7:10 a.m. ET, the 10-year Treasury yield climbed 1 basis point to 4.668%, and the 30-year Treasury bond similarly was just slightly higher at 5.217%. The 2-year Treasury note yield rose 1.6 basis points to 4.22%.

One basis point equals 0.01%, and yields and prices move in opposite directions.

A softer-than-expected July nonfarm payrolls report last week weakened expectations for Federal Reserve interest rate hikes. Deutsche Bank analysts said in a note on Monday that the weaker data "reduced the urgency for further Fed tightening in the near term."

Traders are now pricing in a nearly 44% chance that the central bank will raise rates at its September meeting, down from a 67% reading seen a week prior, according to the CME Group's FedWatch tool.

They will now look ahead to inflation data for July set to be released on Wednesday at 8:30 a.m. ET. The consumer price index inflation reading could "go a long way towards tipping the balance for September [Fed] pricing," Deutsche analysts added.

This will be followed by the producer price index on Thursday, as well as weekly initial jobless claims. Friday will see retail sales data for July and the preliminary Michigan consumer sentiment index.