US Treasuries steady ahead of core September CPI inflation, retail sales

Cornelia Mascio
Ottobre 13, 2017

We have now seen misses in this series during six of the last seven months and while the Fed will surely stress the "mysterious" nature of low inflation, we are increasingly concerned that the FOMC's insistence on pushing toward a December rate hike risks a policy-error, but we're getting as exhausted of saying that as others are surely of hearing it.

The yield on the benchmark 10-year Treasury hovered around 2.32 percent, the super-long 30-year bond yields range-bound at 2.85 percent and the yield on short-term 2-year note also traded flat at 1.52 percent by 10:50GMT.

"On the opposite case though, a miss on one or both reports will disappoint the dollar bulls. and further dumping of the US currency should be expected", he said, also referring to Friday's consumer sentiment report due at 10 a.m.

"The move in the dollar index this week is primarily a correction to the big move that we had in September", said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Meanwhile, sterling slipped to a three-day low against the greenback after the European Union's chief negotiator said Brexit talks were at an "impasse", ramping up political risks for the currency which is down about 12 percent since last year's EU vote.

MSCI's gauge of stock markets across the globe gained 0.06 percent, buoyed gains in Asian markets. The MSCI index reached a record high, as it has for seven of the past eight trading days.

"People got a little bit spoiled by the very nice advances we saw in the first and second quarter, but keep in mind that earnings started perking up in the third quarter of last year so the year-over-year comparisons might not look as robust", said John Carey, portfolio manager at Pioneer Investment Management in Boston.

The Dow Jones Industrial Average fell 7.32 points, or 0.03 percent, to 22,865.57, the S&P 500 lost 1.8 points, or 0.07 percent, to 2,553.44 and the Nasdaq Composite added 0.69 points, or 0.01 percent, to 6,604.24. Eastern Time. Economists polled by MarketWatch forecast consumer prices to have risen 0.6% in September, compared with 0.4% in August, with core CPI to come in at 0.2%.

In commodities, oil prices fell as USA fuel inventories rose despite efforts by OPEC to cut production.

Spot gold added 0.1 percent to $1,293.37 an ounce.

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