US inflation expectations drop the most in 10 months to retest early March levels

Even as inflation and growth concerns are the main catalysts behind the latest risk-aversion in the global markets, the US inflation expectations refreshed multi-day low by the end of Monday’s North American trading session.

Not only that but the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data also dropped the most since July 2021 while flashing a 2.75% rate at the latest, the lowest levels since March 04.

This could help trigger the much-awaited consolidation in the markets ahead of the US Consumer Price Index (CPI) data for April, scheduled for release on Wednesday, which in turn might ease the pressure on the riskier assets like commodities and Antipodeans.

However, fears emanating from China’s covid conditions and Russia’s rejection to ease pressure in Ukraine may keep the market’s risk-aversion alive.

Read: Forex Today: Fear dominates financial markets