Bond Yields Rise as U.S. Futures Steady Before CPI: Markets Wrap

(Bloomberg) — Bond yields climbed and U.S. futures steadied as traders awaited inflation data, a Treasury auction and corporate earnings to assess the market outlook. Bitcoin hit a record.

The yield on the 10-year U.S. benchmark headed back toward 1.7%, with rates across Europe rising in sympathy. Gains in European shares were led by tech shares, while most U.S. stock futures were little changed.

Tuesday’s U.S. consumer-price data is being closely watched as the Federal Reserve has signaled it’s prepared to let the economy run hot to guide the rebound from the pandemic. Although policymakers at the U.S. central bank expect a bump in consumer prices to be short-lived, faster CPI threatens not only bonds but stocks with long-term horizons such as tech.

“A jump in U.S. CPI today is well flagged, but it should be a wake up call to what we think will be stickier inflation in the coming months, if not years,” strategists at ING Groep NV including Padhraic Garvey wrote in a client note. “This would render the Fed’s position increasingly stretched.”

“Policy-sensitive” five-year securities way be most vulnerable to a deeper selloff, according to the ING strategists. The Treasury plans to auction 30-year bonds Tuesday after sales of three- and 10-year notes attracted decent demand Monday.

Meanwhile, Bitcoin jumped to an all-time high as the mood in cryptocurrencies turned bullish before Coinbase Global Inc. goes public. Oil rose toward $60 a barrel.

Some key events to watch this week:

Banks and financial firms begin reporting first-quarter earnings, including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc.The U.S. releases inflation data Tuesday.Economic Club of Washington hosts Fed Chair Jerome Powell for a moderated Q&A on Wednesday.U.S. Federal Reserve releases Beige Book on Wednesday.U.S. data including initial jobless claims, industrial production and retail sales come Thursday.China economic growth, industrial production and retail sales figures are on Friday.

These are some of the main moves in financial markets:

Stocks

Futures on the S&P 500 Index were little changed at 9:40 a.m. London time.The Stoxx Europe 600 Index rose 0.2%.The MSCI Asia Pacific Index gained 0.2%.The MSCI Emerging Market Index was little changed.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro sank 0.1% to $1.1898.The British pound rose 0.1% to $1.375.The onshore yuan was little changed at 6.548 per dollar.The Japanese yen was little changed at 109.34 per dollar.

Bonds

The yield on 10-year Treasuries jumped two basis points to 1.69%.The yield on two-year Treasuries gained one basis point to 0.17%.Germany’s 10-year yield rose one basis point to -0.29%.Japan’s 10-year yield decreased less than one basis point to 0.107%.Britain’s 10-year yield increased one basis point to 0.795%.

Commodities

West Texas Intermediate crude climbed 0.2% to $59.82 a barrel.Brent crude increased 0.3% to $63.46 a barrel.Gold weakened 0.3% to $1,727.52 an ounce.

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