[MARKET ANALYSIS] Treasury futures linger near the prior day's trough after hotter-than-expected CPI data spurred Fed rate hike bets

USTs: +0.5 ticks

• Lingers near yesterday's trough after the recent gains in oil and a hotter-than-expected inflation report spurred Fed rate hike bets for later in the year. Furthermore, the 10yr auction stateside ultimately came in broadly in line with the recent averages, while participants now look to PPI data and US 30yr issuance.

Bunds: -7 ticks

• Remains lacklustre after retreating yesterday beneath the 125.00 level and as supply looms.

JGBs: -33 ticks

• Followed suit to recent losses in peers with long-term Japanese yields at their highest levels in almost 3 decades and with the 30yr yield at an all-time peak amid energy-related inflationary pressures, firmer data and hawkish market pricing for a BoJ rate hike in June.

The hotter-than-expected CPI data has led to increased expectations for Fed rate hikes later this year, which explains the lingering pressure on Treasury futures at their recent low. This shift in inflation outlook may also impact other assets, particularly in fixed income and commodities, as markets recalibrate for potential tightening measures. Upcoming PPI data and 30-year issuance will be critical for assessing the market's reaction and further direction in rates.