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22 May 2015
Treasury yields rise on core CPI data
FXStreet (Mumbai) - The treasury prices in the US declined on Monday, thereby pushing the yields higher after the data showed the core inflation in April rose at the fastest pace since January 2013.
The yield on the benchmark 10-year Treasury note rose to a high of 2.227%. The yield currently trades at 2.206%; up 2 basis points for the day. Meanwhile, the two-year yield, which mimics the short-term interest rate expectations in the US rose 3.7 basis points for the day to 0.614%. The 30-year yield stayed largely unchanged at 2.976%.
Inflation as measured by the consumer price index (CPI) fell 0.2% year-on-year, beating the estimate of a 0.1% fall. The core CPI rose 0.3%, the biggest gain since January 2013, which indicates broad-based increases in prices. The actual figure was higher than the estimated 0.2% advance.
The yields rose as the sharp rise in the core CPI indicates the inflation is rising towards the Fed target. The markets ignored the drop in the headline inflation as much of its was mainly due to the slump in energy prices.
The yield on the benchmark 10-year Treasury note rose to a high of 2.227%. The yield currently trades at 2.206%; up 2 basis points for the day. Meanwhile, the two-year yield, which mimics the short-term interest rate expectations in the US rose 3.7 basis points for the day to 0.614%. The 30-year yield stayed largely unchanged at 2.976%.
Inflation as measured by the consumer price index (CPI) fell 0.2% year-on-year, beating the estimate of a 0.1% fall. The core CPI rose 0.3%, the biggest gain since January 2013, which indicates broad-based increases in prices. The actual figure was higher than the estimated 0.2% advance.
The yields rose as the sharp rise in the core CPI indicates the inflation is rising towards the Fed target. The markets ignored the drop in the headline inflation as much of its was mainly due to the slump in energy prices.