October 11, 2018 / 1:24 PM / 2 months ago

U.S. TIPS breakeven rates extend drop as CPI disappoints

NEW YORK (Reuters) - The U.S. bond market’s gauges on investors’ inflation outlook extended their earlier fall on Thursday as the U.S. consumer price index grew less than expected in September, reducing bets that price pressure is accelerating despite a tight labor market.

At 9:06 a.m. (1306 GMT), the yield spread between 10-year Treasury inflation-protected securities and regular 10-year Treasuries, or the 10-year inflation breakeven rate, was 2.13 percent, down over 3 basis point from Wednesday. It touched 2.12 percent earlier to its lowest level since Sept. 18, according to Tradeweb and Refinitiv data.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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