The recent rally in US Treasury yields is showing signs of fatigue ahead of key US economic data.
Stronger-than-expected US data this month – the Economic Surprise Index is at its highest level since April — has led to a dramatic repricing higher in Fed rate hike expectations on the growing ‘higher-for-longer’ rates view. Rate futures are now pricing in the Fed’s target rate to peak around 5.42% in September from the current 4.50-4.75%, compared with under 5% at the end of January.
