Treasuries, Dollar Advance Amid Inflation Caution: Markets Wrap

Treasuries, Dollar Advance Amid Inflation Caution: Markets Wrap

(Bloomberg) -- Treasuries rose with the U.S. dollar as investors debated the impact of resurgent inflation on monetary policy, while U.S. index futures surrendered gains with stocks near record highs.

The 10-year rate fell back to 1.56% area with focus turning toward Thursday's consumer-price data that may offer clues on how far the Federal Reserve can postpone a tapering of stimulus. Futures on S&P 500 and Nasdaq 100 gauges were little changed after rising during Asian hours. Oil extended losses amid concern the recent rally may have gone too far. European stocks opened higher.

The recovery in the world's largest economy and the Fed's continued dovish stance are supporting a risk-on environment, even as gains are punctuated by worries over inflation, high valuations and disparities in global vaccine rollouts. Forecasts for quickening inflation in May have underpinned volatility this week as traders await clues to when the U.S. central bank will begin discussions on a tighter policy.