U.S. Treasury yields rose in the early hours of Tuesday, ahead of the release of watched inflation data late in the morning.
The yield on the 10-year benchmark treasury note rose nearly 2 basis points to 1.341% at 3:50 am ET. The yield on the 30-year Treasury bond added 1 basis point, to 1.917%. Yields move inversely to prices and a basis point equals 0.01%.
The August consumer price index is due to be released at 8:30 am ET, with a warmer reading. According to a Dow Jones consensus estimate, the CPI is expected to rise 0.4% in August month-on-month and 5.4% year-on-year.
The Federal Reserve is closely monitoring inflation data as it takes into account when to start tightening monetary policy. The Fed is due to begin its last two-day policy meeting next Tuesday.
Steven Bell, chief economist at BMO GAM, said Tuesday that he hoped the Fed would confirm plans to begin reducing bond purchases by the end of the year.
He said a price was now being set in the markets, so he hoped that attention would be set on when the Fed would start raising interest rates, which depended on inflation and employment data.
“This week’s figures may show that inflation has cooled slightly in month-on-month terms, but remains well above the 2% target, it is the Fed’s job of triggering a rate hike said Bell. .
Non-farm payrolls grew by only 235,000 in August, well below expectations of 720,000 new positions.
Auctions are not scheduled for Tuesday.