Major market averages are trading virtually unchanged, while yields advance on Monday as investors keep their eyes on key inflation data due later in the trading week.
The benchmark S&P 500 index (SP500), the blue-chip Dow (dji), and the tech-focused Nasdaq Composite (COMP: IND) are almost flat on the trading day.
From a sector perspective, five of the 11 S&P segments are higher, with Consumer Discretionary and Real Estate at the top of the list. At the same time, the two worst performing sectors of the day are healthcare and information technology.
Looking toward the Treasury market, yields rose again, with the shorter US 2-Year Treasury yield (US2Y) advancing 3 basis points to 4.78%. At the same time, the yield on the long-term 10-year US Treasury bond rose 3 basis points to 4.43%.
See here how other yields trade along the entire yield curve.
The economic calendar is empty on Monday, but Wall Street will receive the March consumer price index on Wednesday and economists predict a 3.4% year-over-year increase.
“How quickly the U.S. economy grows and how quickly inflation falls will determine how soon the Fed cuts rates, and that in turn will play an important role in determining differentials between rates and yields,” said Kit Juckes, F/x strategist. at SocGen.
“A decline in core CPI inflation of 3.7% year-on-year and a monthly increase of 0.3% will not really fuel expectations of an increase in June, long after last week's strong data dampened them. “Market expectations are leaning in favor of a cut in July rather than June and it's easy to see why,” Juckes added.
“Concerns about inflation also meant that Treasury yields hit their highest levels since November across the curve,” said Deutsche Bank's Henry Allen.