U.S. core CPI for April exceeded expectations both month-over-month and year-over-year, leading U.S. Treasury yields to maintain their earlier declines, with rates approaching the day's highs.
Yields across maturities rose by 1 to 2 basis points, while the yield curve spread remained largely unchanged. Following the data release, the curve spread briefly dipped to its daily low.
Overnight index swaps linked to Federal Reserve policy meeting dates held steady, pricing in approximately 20 basis points of rate hikes by the April 2027 policy meeting and around 10 basis points of hikes by the end of this year.
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