Government Bonds Brace for Key Test Ahead of U.S. CPI Release

Long-term government bonds face mounting challenges as markets prepare for the release of crucial U.S. CPI data tonight, according to Michael Leister, head of interest rate strategy at Commerzbank Research.

Key Factors Impacting Bond Markets

• Rising Nominal Yields: Driven by higher real yields and fiscal concerns, which continue to apply upward pressure.

• Inflation Data: The U.S. CPI release will be a major test for the bond market, following inflation reports from the UK, Spain, and France earlier this week.

The data is expected to provide critical insights into inflationary trends and their potential influence on central bank policies, particularly regarding interest rates.