10-Year T-Note futures bounce off contract lows as market digests hot CPI data.
Treasury markets experienced a volatile session on Wednesday following a hotter-than-expected CPI print. The 10-Year T-Note futures initially faced selling pressure, dropping to an intraday low of 103'29—some of the lowest levels for the contract—before reversing course. Prices rallied a full point to trade near 104'29, notching a second consecutive session of upward momentum. Market participants seemingly looked past the inflation data, with sentiment suggesting the Fed will still pause in October. The yield curve flattened as divergent price action took hold. While front-end yields saw selling pressure from the CPI release, the back end of the curve attracted buyers. The 10-Year yield dropped more than 3 bps to 4.18%, falling 15 bps off its intraday high of 4.33%, aided in part by spillover buying pressure from a selloff in equities.
Treasury markets experienced a volatile session on Wednesday following a hotter-than-expected CPI print. The 10-Year T-Note futures initially faced selling pressure, dropping to an intraday low of 103'29—some of the lowest levels for the contract—before reversing course. Prices rallied a full point to trade near 104'29, notching a second consecutive session of upward momentum. Market participants seemingly looked past the inflation data, with sentiment suggesting the Fed will still pause in October.
The yield curve flattened as divergent price action took hold. While front-end yields saw selling pressure from the CPI release, the back end of the curve attracted buyers. 33%, aided in part by spillover buying pressure from a selloff in equities.