U.S. Treasury Bonds Fall to Session Lows as April PPI Data Exceeds Forecasts

Deep News05-13 20:55

U.S. Treasury futures declined sharply across the board, influenced by April's Producer Price Index (PPI) data, which came in above expectations across various metrics. Market expectations for an interest rate hike by mid-next year have strengthened, nearly fully pricing in a 25 basis point increase.

U.S. Treasury bonds erased their earlier gains for the day, with the yield curve shifting to show a rise of 1 to 2 basis points across all maturities.

The yield on the 10-year Treasury note climbed to near 4.49%, approaching the session's peak.

The Overnight Indexed Swap (OIS) contracts aligned with the Federal Reserve's meeting schedule now imply approximately 24 basis points of tightening by the June 2027 policy meeting, up from 21 basis points at Tuesday's close.

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