US 10-year Treasury yields refresh three-month low amid pre-Fed, G7 caution

• US T-bond yields print four-day losing streak amid a quiet Asian session.
• Markets brace for next week’s FOMC following US CPI.
• US infrastructure spending news, Brexit and covid vaccine are extra catalyst that tried, but failed, to entertain investors.
• US Michigan Consumer Sentiment Index, clarity over Fed’s moves eyed.

US 10-year Treasury yields remain pressured for the fourth consecutive day on early Friday, down 2.6 basis points (bps) near 1.43%. In doing so, the coupons dropped to the lowest since early March.

The risk-barometer slumped in the recent days as chatters over the Fed’s tapering gain momentum. The same was boosted the previous day as US CPI marked the fastest jump since 2008 to 5.0% YoY while the Core CPI rallied to the highest in 30 years with a 3.8% figure.

It should, however, be noted that Fed policymakers have repeatedly tried rejecting the tapering woes and hence traders remain cautious of late.

Read: Hot Inflation is warming the seat for the June FOMC

Recently trying to battle the moves were the headlines suggesting the US bipartisan group’s agreement over $1.7 trillion infrastructure spending for eight years and readiness of the US and the UK to donate more covid vaccines.

On the contrary, talks that London and Washington gather support against China and push for covid origin inquiry probe the momentum traders amid a light calendar day. Also, the fears of the G7 update roiling the recent Brexit optimism, due to US President Joe Biden’s refrain from warning UK PM Boris Johnson over Northern Ireland (NI) issues, add filters to the market moves.

Moving on, traders should wait for the US sentiment data for fresh impulse but a sluggish Friday seems on the table.

Read: US Michigan Consumer Sentiment May Preview: Inflation becomes a problem