7/12/2018, 5:54 PM (Source: TeleTrader)
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Treasuries trade mixed as inflation climbs

Traders showed appetite for risk on Thursday as stock markets rebounded, partly with confidence expressed by officials from the United States Federal Reserve about the state of the economy. Statistics showed consumer price growth strengthened to 2.9% on an annual scale in June, the highest level since February 2012, and the core reading hit 2.3%, the strongest point in a year and a half. Treasuries were looking for direction after an initial drop, where the yield curve flattened some more.

A rise in inflation strengthens the case for the central bank's shift to a slightly more hawkish stance in hiking interest rates. President Donald Trump struck a reconciliatory tone in statements during the summit of the North Atlantic Treaty Alliance. Precious metals also rebounded on the wave of positive sentiment and a mixed dollar, while oil remained lower. The US Treasury is about to sell $14 billion in 30-year bonds in a second reopening.

At 5:48 pm CET, the two-year note yield was at 2.586% or just 0.8 basis points higher. The ten-year note yielded 2.851%, a rise of 0.2 points for the day, compared to a decline of 0.2 points for the 30-year bond. Equivalent US futures moved 0.01% lower, traded flat and declined 0.02%, respectively.

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