Bonds Recover With Traders on US Inflation Watch – Europe Market Wrap

Bonds rose, recouping some of Monday’s losses in the run-up to US inflation data, which is critical to the argument over when the Federal Reserve will begin to decrease interest rates.

Treasury yields retraced some of the steep increases that had driven 10-year note rates to their highest level since November the previous day. Government debt rates in the United Kingdom and Germany followed suit, dropping across the curve.

Stocks were quiet as US futures prolonged Monday’s flat close on Wall Street, which was the thinnest trading since Christmas. Europe’s Stoxx 600 Index slipped down.

Caution dominated mood ahead of Wednesday’s inflation report, which is expected to indicate further easing of pricing pressures. Traders are also prepared for the European Central Bank’s rate announcement on Thursday, which might boost bets on the ECB relaxing earlier than the Fed, as well as the start of the first-quarter earnings season.