U.S. bond yields held to a tight range ahead of data on Thursday that could show the annual pace of core inflation receding.
What’s happening
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The yield on the 2-year Treasury
BX:TMUBMUSD02Y
was 4.81%, up 0.4 basis points. -
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 in three of the last four sessions.
What’s driving markets
The U.S. consumer price index for July is slated for release at 8:30 a.m. Eastern and economists polled by the Wall Street Journal expect 0.2% monthly gains for both the headline and the core rate excluding food and energy prices.
While the year-on-year headline rate is seen rising to 3.3% the 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 though: 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 Treasury 30-year bonds.
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