US PPI shock sends yields higher

An unexpected 0.9% jump in core US PPI inflation saw Treasury yields rise and the likelihood of a rate cut next month fall. Core CPI for July also increased by 0.3%, edging June’s figure. Stronger retail sales data applied pressure to bond yields, with the 10-year up by 3 bps. Steep curves continue to be a factor in government bond markets this year, with the US 5-30 curve at its steepest since 2021. Scott Bessent, Treasury Secretary, received widespread pushback from his suggestion that the Federal Reserve should cut rates by 0.5% next month. European markets kept their eyes on developments...