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Stock index futures pushed higher on Tuesday as traders digested the latest round of retail inflation data.
Nasdaq 100 futures (NDX:IND) were +0.9%, S&P futures (SPX) were +1.5%, and Dow futures (INDU) were +1.1%.
The October Consumer Price Index came in at 0.0% M/M compared to the +0.1% expected level and +0.4% prior month reading. At the same time, core CPI, which excludes food and energy arrived at +0.2% M/M versus the predicted +0.3% level and +0.3% prior month point.
The 10-year Treasury yield (US1OY) fell 14 basis points to 4.49%. The 2-year yield (US2Y) dropped 14 basis points to 4.89%.
“Pressure on rates starting into this week was on the upside and coming from the longer end of curves,” ING said. “That may well have come on a busier corporate supply slate this week, but without reading too much into a single day’s move, we do note that overall the strong rally in rates is fading.”
“The Fed for one has pushed back on any notion of earlier rate cuts, instead trying to retain a tightening bias. But at the back end of curves, markets are also weighing the weak 30Y auction and news that Moody’s attached a negative outlook to the US’s top rating at the end of last week.”
The markets are currently pricing in an 85% chance the Fed stays on hold at its December meeting.
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