US inflation expectations recover ahead of this week’s CPI

US inflation expectations improve in the last two days while stretching the rebound from the lowest levels in three weeks ahead of the key Consumer Price Index (CPI) data for October, up for publishing on Thursday.

That said, the inflation precursors, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, print one-week highs of 2.53% and 2.61% according to the latest readings.

It should be noted, however, that the recently mixed US jobs report and cautious comments from the US Federal Reserve (Fed) officials highlight the chatters surrounding pivot policy, which in turn weighs on the US dollar ahead of the key inflation data.

Also exerting downside pressure on the greenback’s gauge versus the six major currencies could be the market’s preparations for Thursday’s US CPI, as well as mixed headlines from China surrounding the coronavirus and stimulus hopes.

Against this backdrop, Wall Street closed with gains and the US Treasury yields were firmer too. However, the US Dollar Index (DXY) remained pressured. That said, S&P 500 Futures remain directionless at the latest.

Also read: AUDUSD retreats towards 0.6450 as market’s optimism stalls, Aussie data softens