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2026-02-13 18:28:10
[US Treasuries and Dollar Await Inflation Data, Markets Hold Their Breath for Policy Signals] ⑴ US Treasury yields and the dollar rose slightly ahead of the release of January inflation data. Konstantinos Chrysikos of Kudotrade noted in a report that the data release could recalibrate expectations for Federal Reserve monetary policy and inject volatility into the foreign exchange and bond markets. ⑵ The market currently expects both overall and core inflation to slow slightly year-over-year. However, Chrysikos stated that several policymakers have recently emphasized caution, suggesting that while price pressures have eased somewhat, inflation risks have not completely dissipated. ⑶ According to Tradeweb data, the two-year US Treasury yield rose 1.2 basis points to 3.476%; the 10-year yield rose 1.9 basis points to 4.122%. The DXY Dollar Index rose 0.1% to 97.062. (4) From a trading perspective, the cautious sentiment ahead of the data release has fueled risk aversion. If inflation falls more than expected, it may strengthen market bets on interest rate cuts this year, thus putting downward pressure on yields and the US dollar. If inflation remains resilient, the cautious rhetoric of policymakers will be supported. (5) The market's focus is entirely on the upcoming CPI data; any reading exceeding expectations could trigger a chain reaction in the stock, bond, and currency markets.
