PPI rises strongly, but where do U.S. bonds go? đł
Unlike the CPI data with mixed information, the PPI data released last Friday was significantly higher than expected. The overall PPI and core PPI increased by 0.3% month-on-month, which was the strongest data since the beginning of the year. The year-on-year growth of PPI increased from 0.2% last month. to 0.8%, and components related to PCE (such as air tickets) were higher than expected.
On the other hand, the consumer confidence survey data was relatively mild, the expectations index was slightly weaker, and inflation expectations have also eased; however, despite the friendly data and another early sell-off in the stock market, U.S. Treasuries were unable to maintain buying orders, and the yield curve continued to rise on the same day. Up 5-7 basis points, similar to the stock market, the chart pattern of fixed income is also looking negative, with the 10-year yield breaking out of the year-to-date trend channel and just one step away from the local high of 4.25%. This will be the next obvious trend target.
