Signs US inflation have strengthened and bond traders are no longer fully
pricing a Federal Reserve rate hike this year. A U.S. Treasury rally sent yields
down as much as 9bp across maturities; the 30-year yield fell 8bp ahead of a new
30-year issue expected to price at the highest yield for that tenor since 2001.
Benchmark oil dropped over 3% on Thursday — oil, the chief driver of UST moves
since a late‑February US strike on Iran sparked a supply shock, is reinforcing
views that US inflation has peaked. US data showed July PPI slowed and
Wednesday’s CPI indicated inflation eased for a second consecutive month.
Short-dated interest-rate contracts rallied, lowering implied policy rates and
signalling traders are scaling back Fed hike bets.
