August 10, 2018 / 1:00 PM / 4 months ago

U.S. TIPS breakeven rates recover after July CPI data

NEW YORK, Aug 10 (Reuters) - The U.S. bond market’s gauges on investors’ inflation outlook bounced from earlier lows on Friday as data showed domestic consumer prices grew in July in line with market expectations, supporting the view inflation is increasing at a modest pace.

At 8:48 a.m. (1248 GMT), the yield spread between five-year Treasury Inflation Protected Securities and regular five-year Treasuries, or the 10-year inflation breakeven rate, was 1.98 percent, flat from late Thursday. Earlier Friday, the five-year TIPS breakeven rate hit 1.97 percent, the lowest in about six months, according to Tradeweb and Reuters data.

The 10-year TIPS breakeven rate was 2.11 percent, down 0.45 basis point from Thursday and near a three-week low.

Reporting by Richard Leong; Editing by Steve Orlofsky

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