U.S. Treasury yields rose further after the release of U.S. retail sales data, with expectations for rate cuts slightly warming.

U.S. December retail sales underperformed expectations, causing Treasury futures to rise across the board to session highs. Yields on all maturities generally fell by 3-5 basis points, with the 2s10s and 5s30s curves flattening by about 2 basis points intraday, moving away from their lows after the data release, as the short and mid segments of the curve led the gains. The OIS pricing corresponding to the Federal Reserve meeting indicates a slight increase in rate cut expectations before the end of the year, with an estimated total of 58 basis points of cuts by December, up from 56 basis points at Monday’s close.