Headline CPI for Canada printed a hotter than expected 4.0% YoY in August (a huge jump from the 3.34% YoY in July)…
Source: Bloomberg
Coming on the heels of the hotter than expected US inflation data, it appears this triggered some more fear in US markets that rates will be ‘higher for longer’ (as we noted was evident in rate-expectations changes yesterday)…
Source: Bloomberg
This sent TSY yields screaming higher (up around 5-6bps)…
Source: Bloomberg
With 5Y yields breaking above the 2022 highs – back to their highest since 2007…
Source: Bloomberg
Some context for the 10Y Yield move (testing yesterday’s highs)…
Source: Bloomberg
And while cause and effect may be hard to discern, oil prices are exploding higher alongside bond yields with WTI above $92…
…which will drag gasoline prices higher… and CPI hotter… and so the vicious circle continues.
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https://www.zerohedge.com/markets/canadian-cpi-triggers-panic-puke-bonds-5y-treasury-yield-highest-2007
