在债券投资者和美联储观察人士评估美国利率走势时，通胀已经重新成为他们的关注焦点。市场预计，10月份美国CPI同比增幅为2.6%，高于9月份2.4%的增幅;核心CPI预计同比增长3.3%，与9月持平，延续此前的黏性表现。Data released on Tuesday showed that the open interest contracts of two-year US Treasury futures have risen for the fourth consecutive trading day, indicating that traders are building put positions before the release of October inflation data on Wednesday.
According to the Intelligence Finance app, traders are heavily betting on further selling in the US bond market, as they anticipate that the policies promised by Trump will lead to a resurgence of inflation, keeping federal fund rates high. Data released on Tuesday showed that the open interest contracts of two-year US Treasury futures have risen for the fourth consecutive trading day, indicating that traders are building put positions before the release of October inflation data on Wednesday.
As short bets expand, US bonds face selling pressure. On Tuesday, yields on US Treasury bonds rose by more than 10 basis points across the board, with the yields on two-year and five-year US Treasury bonds rebounding to their highest levels since July. Citi strategist David Bieber said: 'We see investors chasing price trends. This is a market positioning itself correctly for election results. However, in the short bets in the US bond market, investment is generally insufficient.'
As bond investors and observers from the Federal Reserve assess the direction of US interest rates, inflation has once again become their focus. The market expects that the year-on-year increase in US CPI in October will be 2.6%, higher than the 2.4% increase in September; core CPI is expected to grow year-on-year by 3.3%, consistent with September, continuing its previous sticky performance.
The uncertainty about the future direction of US policies and recent mixed economic data have led to significant differences in market expectations for the December decision of the Federal Reserve. Traders currently estimate that the probability of another 25 basis point rate cut by the Fed in December is slightly higher than 50%.
Minneapolis Federal Reserve President Kashkari said on Tuesday that he will focus on the upcoming inflation data to determine whether another rate cut in December is appropriate at the policy meeting. He noted that given the elevated housing inflation, it may take one to two years for inflation to reach the target. However, he added that the cooling of housing prices is 'encouraging.'
Scott Johnson, Deputy Head of Bloomberg Economics Global Model, stated that the US CPI data for October released on Wednesday could further weaken expectations of a rate cut by the Federal Reserve in December. Higher-than-expected inflation data could push up the forecast for the yield on the two-year US Treasury bonds to 2025.
