U.S. Treasury yields inched higher early Tuesday as investors look toward key inflation data for July and assess the extension of U.S.-China trade truce.
The 10-year Treasury yield was marginally higher at 4.279% at 3.34 a.m. ET, and the 2-year Treasury yield was about one basis point higher at 3.764%. The 30-year Treasury bond yield was less than one basis point higher at 4.848%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
The core consumer price index, which is set to be released Tuesday morning, is expected to climb 3.1% on a yearly basis and 0.3% on a monthly basis, according to analysts polled by Reuters. That would be up from June’s 2.9% and 0.2%, respectively.
“We think the market reaction to the CPI is probably skewed in favor of Fed rate cuts,” said Eastspring Investments. A lower-than-expected CPI should increase market pricing for cuts in September and year-end as it reduces the “ostensible need” for Fed caution about inflation, the investment firm’s experts said in a note.
