FX.co ★ US 10-Year Note Edges Higher, Us-China Talks and CPI Eyed

The yield on the U.S. 10-year Treasury note moved slightly upward on Wednesday, nearing 4.5%, as investors evaluated the recent progress in U.S.-China trade negotiations and anticipated key inflation data due later in the day. After two days of talks, U.S. and Chinese officials established a framework to implement the so-called Geneva consensus, facilitating last month's tariff reductions. However, the absence of specific details, coupled with the necessity for final approval from Presidents Donald Trump and Xi Jinping, left the markets skeptical. Attention is now focused on the May CPI report, expected to indicate a modest rise in inflation, which would support the Federal Reserve's cautious approach towards further interest rate reductions. Currently, markets are anticipating nearly two 25 basis-point cuts before the year's end. Additionally, investors are keenly observing today's auction of the 10-year note and tomorrow's 30-year bond sale, which will provide additional insights into the demand for longer-term U.S. debt.