Prior to the CPI data, traders were betting on a 50% chance of interest rate hikes in September, and the treasury bond market pricing bias data was moderate

Comparative news, according to the swap market trading situation, the probability of a 25 basis point interest rate hike currently included by traders is about 50%. After the unexpected weakening of non-farm payrolls in July, Wall Street almost formed a 50:50 extreme split pricing on whether the Federal Reserve raised interest rates by 25 bps in September, and the Federal Reserve under Walsh's leadership clearly reduced forward-looking guidance, making the market have to rely again on hard data to determine the policy path.

The impact of July's CPI is clearly asymmetrical — that is, moderate inflation data can further weaken the reasons for interest rate hikes, but data that exceeds expectations and is more likely to quickly turn the September rate hike back into the benchmark scenario. As for the 10-year US bond yield, which is the anchor of global asset pricing, the current risk-return on the bond market has actually clearly skewed towards the pricing direction where the moderate CPI in July drove the rapid decline in yield, mainly due to the positive resonance between macro data and the CTA bond market position structure. (Zhitong Finance)