US Treasury yields surged higher in early Tuesday trading before widely awaited consumer price index data for March could fuel bond investor concerns. on rising inflation.
Treasures are doing?
The yield on 10-year Treasury bonds
at 1,681%, up from 1,675% at the end of Monday, while the 2-year bond
Stable at 0.173%. 30-year bond yield
increased by 0.4 bps to 2,349%.
What is driving the Treasures?
The bond market is preparing for a sharp rally in the US consumer price index in March, with analysts polled by MarketWatch forecasting a 0.5% monthly gain. However, the core metrics for energy and food prices have come up with a less impressive 0.2% increase. Annual CPI is expected to rise to 2.5% from 1.7% when inflation fell a year ago due to the pandemic falling out of calculations.
The long-standing budget beat out throughout the year in anticipation of rising inflation, freed by the reopening of the US economy. However, analysts warned that March’s inflation reading may not tell much about the price path as annual inflation measures will begin to eliminate weak indicators in March. last, when the trajectory of the pandemic started to rise in America.
The Federal Reserve Bank of New York will then announce the bond buying schedule over the next few weeks. This will draw attention after New York Fed official Lorie Logan hinted that the central bank would begin making adjustments to its purchases of assets.
Several members of the Fed rate setting committee are to speak on Tuesday, including Philadelphia Fed President Patrick Harker and San Francisco Fed President Mary Daly.
What did the market participants say?
“A bigger leap than last week’s prediction for US producer price inflation to a 10-year high should have provided a warning, so the immediate market response to US CPI dates. Today may be less impressive than the rise to 2.5% YoY (consensus). , ”Said Antoine Bouvet, a price strategist at ING.