US sovereign debt yields continued to rise as investors assessed the direction of monetary policy following new data indicating that inflation remained above the target set by the US Federal Reserve.
Official data revealed that the general consumer price index rose by 0.3% on a monthly basis during the past month, while the annual inflation rate remained stable at 2.4%.
Although these figures are in line with analysts' expectations, they indicate that inflationary pressures will continue to be above the target level of 2%.
Analysts also believe that this data does not yet reflect the full impact of rising energy prices linked to geopolitical tensions and the ongoing war in the Middle East, which could add further inflationary pressures in the coming period.
Meanwhile, oil prices continue to record strong gains, despite the International Energy Agency announcing its approval of the withdrawal of large and unprecedented amounts from the emergency oil reserves of member countries, in an attempt to calm the markets.
US President Donald Trump also indicated the possibility of taking a similar step to support supply stability.
In the bond market, the yield on 10-year US Treasury bonds — the benchmark yield watched by global markets — rose by 7.2 basis points to 4.207%.
The yield on two-year bonds, which is highly sensitive to interest rates and monetary policy, also increased by 6.7 basis points to 3.634%.
Investors are awaiting the release of the core Personal Consumption Expenditures (PCE) price index reading next Friday, which is the Federal Reserve's preferred measure for assessing inflation trends and determining the path of interest rates in the coming period.
