Treasury yields moved slightly lower Monday, with investors awaiting this week’s round of closely watched economic data, including the August consumer-price index reading.

What are yields doing?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.325%

was at 1.323%, compared with 1.340% at 3 p.m. Eastern on Friday. Yields and debt prices move in opposite directions.

The 2-year Treasury note yield
TMUBMUSD02Y,
0.216%

was at 0.213%, down from 0.217% late Friday.

The yield on the 30-year Treasury bond
TMUBMUSD30Y,
1.907%

fell to 1.905% versus 1.933% late Monday.

What’s driving the market?

Treasury yields remained largely rangebound with a light economic calendar on Monday. In the only major data release of the day, the Treasury Department reported that the U.S. federal budget deficit narrowed to $2.71 trillion in the first 11 months of the fiscal year. This is down $297 million or 10% from the $3 trillion deficit over the same period last year.

Tuesday brings the August consumer-price index reading. Data on August retail sales and the latest reading of the University of Michigan’s consumer sentiment index are also due this week.

A high inflation reading has the potential to complicate the Federal Reserve’s decision on when and how fast to begin scaling back asset purchases. The Wall Street Journal reported that Fed officials could begin setting the stage for the tapering of the $120 billion monthly bond purchase program in Treasurys and mortgage-backed securities at their Sept. 21-22 meeting, with an announcement at the following meeting in early November.

Read: When the Fed finally steps back, can the U.S. stock and bond markets stand on their own legs?

Also last week, the European Central Bank announced it would slow asset purchases under its Pandemic Emergency Purchase Program, or PEPP, while maintaining the pace of buying under its other longer-running asset purchasing program. ECB President Christine Lagarde argued the move was a “recalibration” rather than a “tapering.”

See‘The lady isn’t tapering,’ says Lagarde as ECB slows asset purchases

Analysts said the focus for Europe now turns to December, when the ECB will likely need to make a decision over the longer term fate of its PEPP purchases, which are scheduled to run at least until the end of March.

Back in the U.S. on Monday, the Dow Jones Industrial Average
DJIA,
+0.76%

was on track for the first positive finish in six sessions, but the broader equity market was struggling to claw back from the worst weekly decline in nearly three months for much of the broader market.

What are analysts saying?

Rates markets “will be closely watching” CPI, retail sales and the University of Michigan data this week, UniCredit analysts wrote in a note. “One key element to watch will be the movement in real yields and breakevens. Last week, break-even rates increased and real yields declined further in both Europe and the U.S., with both movements much more pronounced in the eurozone,” they said. “This suggests that concerns on the growth outlook persist, while investors expect inflation to remain high for the time being.”

“All eyes are on August U.S. CPI data – and whether the monthly pace of price increases slowed down from July,” according to strategists with BlackRock Investment Institute. “The data will help investors assess the persistence and breadth of inflationary pressure amid the unprecedented restart dynamics.”

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