US Treasury bond yields were calm early Wednesday despite an expected surge in inflation, and data tracking price growth in April should be released later this morning.
The yield on the 10-year benchmark Treasury note barely changed at 1.622% shortly after 8 a.m.CET. The yield on the 30-year government bond fell to 2.34%. The returns move inversely to the prices.
The consumer price index for April is expected to be released at 8:30 a.m.CET. According to estimates by Dow Jones, it is likely to have increased by 0.2% compared to the previous month, an increase of 3.6% compared to the previous year. This jump in the headline CPI would be the biggest since September 2011.
The CPI excluding food and energy is projected to rise 0.3% in April and 2.3% over the last 12 months.
The CPI rose 0.6% month-on-month in March and 2.6% year-on-year, according to the Ministry of Labor.
Rising inflation has been a growing concern for investors, although Federal Reserve Chairman Jerome Powell said any price hike should be temporary.
Jonathan Bell, chief investment officer at Stanhope Capital, told CNBC’s “Squawk Box Europe” on Wednesday that the Fed would say that much of the expected surge in inflation is actually just “base effects,” which compares it to lower prices in the EU last year amid the pandemic.
And while Bell acknowledged the existence of base effects, he argued that “the underlying inflationary pressures will still be there over the summer months”.
Meanwhile, Fed vice chairman Richard Clarida will be speaking at the National Association for Business Economics International Symposium on the US economic outlook and monetary policy at 9:00 a.m.CET.
Auctions for 119-day bills worth $ 35 billion and 10-year bills worth $ 41 billion are due to take place on Wednesday.
– CNBC’s Maggie Fitzgerald contributed to this market report.
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