Inflation Falls; Bonds Quiet

Treasury bond prices are starting off the day little changed from yesterday amid news that inflation fell significantly in April. The Benchmark Ten-Year’s yield is resting around 71 basis points despite the news that the Consumer Price Index fell by 0.8% last month. Last month’s decline helped bring the year-over-year rate all the way down to 0.3% from 1.5%. Pre-release estimates expected a fall to 0.4%.

Without food & energy, core CPI dropped 0.4% last month with the new year-over-year rate declining from 2.1% to 1.4%. Surveys anticipated a fall to 1.7%. With the evaporation of inflation, Real Average Hourly Earnings soared to an April gain of 7.5% versus March’s rise of 1.6%.

Earlier today, the National Federation of Independent Businesses announced that its Small Business Optimism Index sank less than expected to 90.9 from 96.4. Analysts forecast a fall to 83. In other news, the Fed will today begin its purchase of corporate bond ETF’s while the Treasury auctions $32B worth of new Ten-Years notes.