US INFLATION EXPECTATIONS RENEW ONE-WEEK HIGH AS MARKET AWAIT US CPI

US inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, challenge the market’s previous risk-on mood by refreshing weekly top. The inflation precursors become even more important as traders await the US Consumer Price Index (CPI) for March and the Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting on Wednesday.

Also read: US CPI Preview: US Dollar on the back foot and poised to fall further

That said, the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) jumped to the highest levels since April 03 while renewing the weekly tops with 2.29% and 2.36% figures by the end of Tuesday’s North American session.

Not only the upbeat inflation signals, the latest comments from President and CEO of the Federal Reserve Bank of Minneapolis Neel Kashkari also teases US Dollar bulls as he said, “2% inflation target should not be changed.”

It’s worth noting, however, that other Fed policymakers have flagged mixed concerns of late and the CME’s FedWatch Tool also signals easing hawkish bias for the US central bank’s 0.25% rate hike in May, which in turn weigh on the US Dollar of late.