FX.co ★ Treasuries Give Back Ground As Inflation Data Looms

On Monday, the bond market experienced a downturn as Treasury prices weakened, following a recent period of gains. During the session, bond prices faced early pressure and remained in negative territory throughout the day. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, rose by 4.8 basis points to reach 4.199 percent.

This decline in Treasury prices may have been partly due to profit-taking, especially after the ten-year yield reached its lowest closing level in over a month last Friday. Additionally, investors were anticipating key U.S. inflation data set to be released later in the week.

The consumer price index (CPI) and the producer price index (PPI) reports, scheduled for Wednesday and Thursday, respectively, could significantly influence expectations regarding future interest rate adjustments. While it is broadly anticipated that the Federal Reserve will reduce rates by another 25 basis points next week, uncertainty looms over the possibility of continued rate cuts into the early part of next year.

Looking forward, trading on Tuesday is expected to be somewhat subdued, given the lack of major economic developments on the U.S. calendar.