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 BX:TMUBMUSD02Y was 4.81%, up 0.4 basis points. Yields move in the opposite direction to prices.
- The yield on the 10-year Treasury BX:TMUBMUSD10Y was 4.02%, up 1.2 basis points.
- The yield on the 30-year Treasury BX:TMUBMUSD30Y 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.