As of Wednesday morning, U.S. government prices have come off yesterday’s low and a two-day slide following softer than expected inflationary data. Consumer prices excluding food and energy products slowed to +1.8% YoY (same as headline PPI) and just 0.1% in May from the previous month, which was below expectations. This falls below the Fed’s target of 2.0% as the Federal Funds futures indicated an 84% chance of a rate cut by the July meeting. Muted inflation, coupled with concerns involving global and domestic growth, have boosted prices with the benchmark ten-year yield falling to a 20-month low last Friday. The U.S. 10-year yield remains bearish trend with the current range seen between 2.04 – 2.22% with near term resistance on Sept t-bonds coming in around 154-07 and support around 153-04.
30-Yr T Bond Sep ’19 Daily Chart