US Treasury Yields Recover, Markets Regain Stability
Investors began to put aside the weak US economic data that had previously weighed on markets, with the US 10-year Treasury yield rising again in Asian trading.
Meanwhile, gold, Bitcoin and oil remained in narrow trading ranges after suffering overnight losses, as market participants began to reassess their positions ahead of key inflation data due this week.
A disappointing US consumer confidence report on Tuesday has raised concerns about the broader economic outlook, as well as the impact of President Donald Trump’s policies on global growth.
However, as sentiment has stabilized, traders are now re-adjusting their expectations for monetary policy, with the market now expecting more than two more interest rate cuts by the Federal Reserve (Fed) by 2025.
Inflation Data in Focus, Markets Consider Fed's Next Move
Focus now shifts to the release of the core personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, which is expected to slow to its lowest rate since June.
A weaker-than-expected inflation reading could further fuel speculation of monetary easing, while any upside shock could challenge market assumptions about a rate cut.
