Bond Report: Bond yields steady ahead of CPI, 30-year auction


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Bond yields held to a tight range ahead of data that could show the annual pace of core inflation receding.

What’s happening

  • The yield on the 2-year Treasury
    was 4.81%, up 0.4 basis points. Yields move in the opposite direction to prices.

  • The yield on the 10-year Treasury
    was 4.02%, up 1.2 basis points.

  • The yield on the 30-year Treasury
    was 4.18%, up 0.9 basis points.

After spiking last week, the yield on the 10-year Treasury has declined three of the last four sessions.

What’s driving markets

The consumer price index for July is slated for release at 8:30 a.m. Eastern, where economists polled by the Wall Street Journal expect 0.2% monthly gains for both the headline and the core.

Core CPI is seen slowing to a 4.7% year-over-year rate from 4.8%.

“Any bad surprise on the inflation front could revive the Federal Reserve hawks, but we are far from pricing another hike in September just yet; activity on Fed funds futures assesses more than 85% chance for pause in September FOMC meeting,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Potentially worrisome: The Cleveland Fed’s model forecasts 0.4% gains for both the headline and the core.

There’s also an auction of $23 billion in 30-year notes.

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Alexandra Williams
Alexandra Williams
Alexandra Williams is a writer and editor. Angeles. She writes about politics, art, and culture for LinkDaddy News.

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