Bond Traders Wait for CPI to Fuel — or Doom — the Market’s Rally

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Bloomberg News

Jonathan Cohn,Treasury Yields,Interest Rates

(Bloomberg) -- Nothing has been setting the US bond market’s direction this year more than the monthly inflation figures. This week will be no exception...

-- Nothing has been setting the US bond market’s direction this year more than the monthly inflation figures. This week will be no exception.Ice Cube’s Big3 Basketball League Sells Its First Team in $10 Million Deal

The last one, on April 10, sent 10-year Treasury yields surging 18 basis points, the biggest one-day move caused by the CPI data since 2002. All told, half of the more than 60-basis-point jump in that benchmark rate this year occurred on days when the CPI was released. “It’s a bit to do with people having put on risk before and gotten burned, with risk takers now being a bit gun shy,” said Cohn.

The CPI is expected to show slowing in inflation. The core rate — which is seen as the best gauge of underlying pressures, because it excludes volatile food and energy costs — is expected to have risen by 0.3% in April from a month earlier, down from 0.4% in March, according to forecasters surveyed by Bloomberg. The overall index is seen rising by 3.4% from a year earlier, compared with the 3.5% increase in March.

May 15: MBA mortgage applications; Empire manufacturing; consumer price index; real average earnings; retail sales; NAHB housing market index; Treasury TIC data

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