Although policymakers at the U.S. central bank expect a bump in consumer prices to be short-lived, many traders disagree, with fears of faster CPI playing out across duration-heavy assets from bonds to tech stocks.
“A jump in U.S. CPI today is well-flagged, but it should be a wake up call to what we think will be stickier inflation in the coming months, if not years,” strategists at ING Groep NV including Padhraic Garvey wrote in a client note. “This would render the Fed’s position increasingly stretched.”
“Policy-sensitive” five-year securities way be most vulnerable to a deeper selloff, according to the ING strategists. The Treasury plans to auction 30-year bonds Tuesday after sales of three- and 10-year notes attracted decent demand Monday.
Elsewhere, modest gains in European equities were led by cyclicals such as retailers, travel companies and miners, while utilities lagged.
Bitcoin jumped to an all-time high as the mood in cryptocurrencies turned bullish before Coinbase Global Inc. goes public. Oil rose above $60 a barrel
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