Action was relatively muted in the bond market Tuesday, with US yields slightly higher ahead of this week’s Treasury auctions and a key inflation reading. The Fed’s preferred gauge of underlying inflation likely grew at a slower pace last month, offering policymakers some breathing room to address weakness in the US labor market.
The report on Friday is forecast to show the personal consumption expenditures price index excluding food and energy rose 0.2% in August, compared with 0.3% in July. On an annual basis, the so-called core measure is seen holding at a still-elevated 2.9%.
Several Fed officials are set to speak at public events this week, including Chair Jerome Powell on Tuesday. In his first policy speech since joining the Fed, Governor Stephen Miran laid out his argument for aggressively lowering interest rates.
Meantime, Fed Bank of St. Louis President Alberto Musalem noted he sees limited room for cuts amid elevated inflation. His Cleveland counterpart Beth Hammack said officials should be cautious to avoid overheating the economy.
Elsewhere, New Zealand is set to appoint a woman as head of its central bank for the first time as it seeks to refresh an institution damaged by leadership turmoil, according to a person familiar with the matter. In another twist, the new Reserve Bank of New Zealand governor is a foreigner, the person said, asking not to be named discussing market-sensitive information. They wouldn’t identify the new governor.
In Hong Kong, super typhoon Ragasa poses a potential test for the city’s push to keep markets open during severe weather. The storm could delay the trading debut of Zijin Gold International Co. after the world’s biggest initial public offering in months.