Authorities bond yields rise forward of the main inflation report

The yield on 10-year government bonds was 1.69% early Tuesday morning, ahead of the release of a major inflation report due before the opening bell on Wall Street.

The benchmark 10-year Treasury note yield rose to 1.691% at 3:45 a.m. ET. The yield on the 30-year government bond rose to 2.35%. The returns move inversely to the prices.

The March reading for the consumer price index is expected to be published at 8:30 a.m.CET. Economists surveyed by Dow Jones forecast an increase in the overall index of 0.5% compared to the previous month and 2.5% compared to the previous year.

Government bond yields have risen just under 1% since late January as inflation fears mount as the U.S. economy recovers from the coronavirus pandemic.

Eric Lonergan, fund manager at M&G, told CNBC’s Squawk Box Europe on Tuesday that he believed that bond markets had now “priced in some sort of post-crisis normalization” as yields had risen recently.

He also said that an expected spike in inflation “is now so well marked that everyone is expecting some sort of temporary spike”.

Traders are also likely to keep an eye on the $ 24 billion worth of 30-year bond auctions to gauge investor appetite for long-term sovereign debt.

An auction for 42-day bills valued at $ 40 billion is also scheduled for Tuesday.

– CNBC’s Patti Domm contributed to this report.