The CPI inflation data came in below expectations, causing US Treasury yields of all maturities to plummet.
The inflation data for October CPI, released on Tuesday (11/14), unexpectedly declined across the board. The CPI increased by 3.2% year-on-year, lower than the market expectation of 3.3%. The core CPI increased by 4% year-on-year, the lowest in more than two years, indicating that the inflation pressure is easing. This reinforced the investors’ expectation that the Fed will stop raising interest rates. After the data release, the yields of US Treasuries of all maturities plummeted. The closing yield of the 10-year US Treasury fell by about 19bps to 4.45%, reaching the lowest level since late September. The yield of the 2-year US Treasury, which is sensitive to interest rate changes, dropped by 20bps to 4.83%, falling below 5%.
Remarks from officials
· Chicago Fed President Austan Goolsbee said that inflation in the US is cooling down at the fastest pace in at least 40 years or even longer, while the unemployment rate has only risen slightly.
· Richmond Fed President Michael Barr said that with an inflation rate of 3.2% and an unemployment rate of 3.9%, the US has emerged from the economic recession triggered by the pandemic, but the Fed’s work on fighting inflation is not yet done.
Economic data
· US October CPI growth YoY : 3.2% (Expected: 3.3%, Previous: 3.7%)
· US October CPI growth MoM : 0.0% (Expected: 0.1%, Previous: 0.4%)
· US October Core CPI growth YoY : 4.0% (Expected: 4.1%, Previous: 4.1%)
· US October Core CPI growth MoM : 0.2% (Expected: 0.3%, Previous: 0.3%)
US Treasury market conditions
· The 2-year US Treasury yield decreased 20bps to around 4.83%.
· The 10-year US Treasury yield decreased 19bps to around 4.45%.
According to the CME FedWatch tool, after the release of the October CPI inflation data, the market expects the Fed to keep interest rates unchanged in December, and anticipates the first rate cut to occur in May next year, with a probability of about 65% (vs 35% a day ago).
CPI通膨數據低於預期，各天期美債收益率大幅走低
週二（11/14）公布 10 月CPI通膨數據意外全線下滑，CPI 年增 3.2%，低於市場預期的3.3%，核心 CPI 年增 4%，為2 年多來最低，顯示通膨壓力正在趨緩，強化了投資人認為聯準會將停止升息的預期。數據公布後，各天期美債收益率大幅走低，收盤10年期美債收益率下跌約19bps至4.45%，回到9月下旬以來的低位，而對利率敏感的2年期美債收益率則是下跌20bps至4.83%，回落至5%以下。
官員談話
· 芝加哥聯準銀行行長古爾斯比 (Austan Goolsbee) 表示，美國通膨正在降溫，可能是至少 40 年來甚至更長時間以來最快的速度來降溫，而失業率僅有限上升。
· 里奇蒙聯準銀行總裁巴金 (Michael Barr) 稱，通膨率為 3.2%，失業率為 3.9%，美國已擺脫疫情引發的經濟衰退，但聯準會抗通膨這項工作還沒有完成。
經濟數據
· 美國 10 月 CPI 年增率報 3.2%，預期 3.3%，前值 3.7%
· 美國 10 月 CPI 月增率報 0.0%，預期 0.1%，前值 0.4%
· 美國 10 月核心 CPI 年增率報 4.0%，預期 4.1%，前值 4.1%
· 美國 10 月核心 CPI 月增率報 0.2%，預期 0.3%，前值 0.3%
美債市場狀況
· 2年期美債利率較前日下跌約20bps至約4.83%
· 10年期美債利率較前日下跌約19bp至約4.45%
根據 CME FedWatch 工具，在10月CPI通膨數據公布後，市場認為聯準會 12 月將維持利率不變，預計首次降息將在明年 5 月，機率約65%，相較前一天為35%。