Eurozone Bond Yields Slide, Treasury Yields Seek Direction Ahead of CPI Data — Update

By Emese Bartha

Treasury yields were little changed on Tuesday as investors awaited U.S. consumer-price inflation data for October, while eurozone bond yields fell sharply as oil prices retreated.

The data, due for release at 1330 GMT, will be watched for signs of acceleration and for any hints of widening inflationary pressures in the economy. The U.S. Bureau of Labour Statistics will only publish monthly CPI data, without a year-on-year reading because of last year's government shutdown.

"Markets will trade purely on the monthly run-rate, where any persistence in shelter or core services will keep the U.S. Treasury curve under pressure and bolster December Federal Reserve tightening expectations," Patrick Munnelly, market strategist at Tickmill Group, said in a note.

The 10-year Treasury yield fell 0.2 basis point to 4.859%, while the 10-year German Bund yield declined 3.1 basis points to 3.239%, according to Tradeweb. Ten-year yields of bonds from France, Belgium and Italy fell more than that, with investors currently looking beyond deficit and debt problems in those countries.

Brent for front-month January last traded 2.1% lower at $90.62 a barrel.

"In the wake of a blowout jobs report and other signs of a resilient economy, the Fed is going to have little patience with inflation," said BeiChen Lin, senior investment strategist at Russell Investments, in a note. "Even a minor surprise could seal the deal on a December hike."

Analysts in a Wall Street Journal poll forecast the consumer-price index to have risen 0.3% in October from the prior month, down from a 0.6% rise in September. They expect core CPI, which strips volatile items such as food and energy, to rise 0.2% versus 0.3% previously.

"In addition to the main inflation numbers, another key focal point will be the breadth of inflationary pressures," Lin said, adding that this will play a key role in determining the path of future monetary policy decisions.

Money markets currently price in an 84% probability of a 25-basis-point Fed rate hike in December, according to LSEG.

Meanwhile, the 10-year Treasury yield looks attractive at levels around 5%, Michiel Tukker and Benjamin Schroeder, senior rates strategists at ING, said in a note.

"Having said that, we still warn about the upside risks to rates in the near term," they wrote. "Markets are constantly rotating their attention between AI and inflation concerns, keeping volatility high."

The Treasury's $42 billion auction of new 10-year notes will be another event to watch Tuesday.

Write to Emese Bartha at emese.bartha@wsj.com

(END) Dow Jones Newswires

November 10, 2026 04:18 ET (09:18 GMT)