NEW YORK May 15 The U.S. bond market's gauges
on inflation expectations rose on Monday, recovering a bit
following Friday's steep drop, in step with higher oil futures
on expectations major oil producers would extend production cuts
to prop up prices.
The 10-year inflation breakeven rate, or the yield
difference between 10-year Treasury Inflation Protected
Securities and regular 10-year Treasury notes, was last at 1.88
percent, up 1 basis point from Friday, Tradeweb data showed.
U.S. oil futures rose 3 percent to $49.35 a barrel
early Monday after Saudi Arabia and Russia agreed on the need
for supply cuts to continue for another nine months until March
Crude prices hit five-month lows in earlier May on rising
U.S. oil production and inventories.
Since March, falling energy costs have put broad downward
pressure on the Consumer Price Index, which TIPS payments to
investors are benchmarked against.
On Friday, TIPS inflation breakeven rates suffered their
worst day so far this year as the CPI in April rose less than
traders had expected. That raised concerns over when domestic
inflation would reach the Federal Reserve's 2 percent goal.
(Reporting by Richard Leong; Editing by Bernadette Baum)