US 10-year, 5-year inflation expectations slide to fresh monthly low

US inflation expectations, per the breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, dropped during the five consecutive days in the last.

That said, the US Inflation expectations on the 10-year and 5-year horizons print 2.35% and 2.40% at the latest, matching the lowest levels since early October during the five-day downtrend.

The recent easing in the US inflation precursor adds strength to the talks surrounding the US Federal Reserve’s (Fed) monetary policy pivot and tried to pressure the US Dollar (USD) towards the south. However, the risk-off mood appeared to have challenged the USD bears of late.

It’s worth noting that the latest easing in the US Producer Price Index (PPI) for October and improvement in the Federal Reserve Bank of New York's Empire State Manufacturing Index for November also seemed to have favored the risk-on mood previously.

Moving on, the US Retail Sales for October, expected at 1.0% versus 0.0% prior, will be crucial for the market players to watch as the recent US numbers have been positive for the market’s risk profile, by pushing back the need for aggressive rate hikes.