U.S. Treasury results surged; inflation information dominates

May 9, 2023: On Monday, U.S. Treasury results climbed, counting to the substantial gains in the previous session, as retailers braced for important inflation data slated for release this week.

The 2-year Treasury yield climbed 4.4 basis points to 3.966%. The 10-year Treasury yield was up by 5.5 basis points to 3.501%. Products and prices move in opposite directions. One basis point equals 0.01%.

The April reading on the U.S. Consumer price index, a followed measure of inflation, is due Wednesday.

Economists polled by Dow Jones expect CPI to rise 5% last month on a year-over-year basis. Month over month, they see a 0.4% gain.

Investors will review the report for clues on future Federal Reserve policy moves. As of Monday, traders are pricing in just a 13.1% chance of another 25 basis-point rate hike next month, according to the CME Group’s FedWatch tool.

Yields surged Friday as the Bureau of Labor Statistics data showed stronger-than-expected jobs growth in April, even as markets grappled with the banking fallout.

The U.S. added 253,000 nonfarm payrolls in April, surpassing the 180,000 anticipated by Wall Street.

The unemployment pace was 3.4%, below an estimate of 3.6%. A strong job market will make it less likely that the Federal Reserve halts its aggressive tightening campaign, a policy shift multiple on Wall Street had hoped for.