Reply To: Bond Traders Weekly Outlook: Fed Favorites PCE and ECI


U.S. Treasuries are on track for a lower start with shorter tenors expected to show slight relative weakness in the early going.

Treasury futures selling pressure built as the focus turned to Europe, where the U.K. released hotter than expected inflation figures for March. Still CPI slowed to 10.1% from 10.4% on a yr/yr basis while core CPI held at 6.2% yr/yr.

Inflation readings from the eurozone were also hotter than expected, accelerating the yr/yr core CPI growth rate to 5.7% from 5.6% while CPI slowed to 6.9% yr/yr from 8.5%.

The early selling in Treasuries is lifting the 10-yr yield to a four-week high with its 50-day moving average (3.659%) looming above.

Crude oil is back near its low from April 3 (79.00) while the U.S. Dollar Index is up 0.4% at 102.15.

Market participants will not receive any top tier data today but he U.S. Treasury will hold a $12 bln 20-yr bond reopening this afternoon.

2-yr: +6 bps to 4.27%
3-yr: +6 bps to 3.97%
5-yr: +5 bps to 3.73%
10-yr: +5 bps to 3.62%
30-yr: +2 bps to 3.81%