U.S. Treasury buyback plans and CPI data set bond market focus

  • U.S. Treasury will announce an expanded bond buyback Wednesday and conduct it the following day.
  • Treasury said operations will be at least double the previous $2 billion maximum.
  • Swaps traders priced a roughly 60% chance of a quarter-point September Fed hike Friday.

U.S. bond investors are awaiting Treasury buyback details and August inflation data after a volatile period that left 30-year yields near 5.25% and increased expectations of a Federal Reserve rate increase. The Treasury is scheduled to announce an enlarged buyback operation on Wednesday for execution the following day, saying purchases will be at least double the previous $2 billion maximum. Earlier planning in the topic record had described a $14.5 billion weekly limit, potential Treasury-session volume of $16.5 billion, roughly $38.25 billion of September purchases and a $4 billion long-maturity session limit; the newer report leaves the final operation size open, with more than $4 billion seen as potentially supportive for bonds. August job growth exceeded forecasts, lifting short-term yields and flattening the yield curve. Bloomberg-polled economists expect August CPI to rise 3.4% from a year earlier and core CPI to increase 2.4%, while swaps markets priced a roughly 60% chance of a quarter-point Fed increase this month. The existing record also tracks elevated oil and inflation pressures, stock-market volatility, South Korean share purchases, and earlier Bitcoin and XRP positioning around Treasury liquidity expectations.

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