Cooler-than-expected US inflation data eases pressure on the Federal Reserve, weighing on the dollar and Treasury yields.
US Core PCE inflation for April matched estimates at 3.3% year-over-year, while the monthly reading came in at 0.2%, below the 0.3% forecast. The softer data provided relief amid persistent inflation concerns, contributing to a broad dollar decline and lower Treasury yields.
Earlier, the Atlanta Fed’s GDPNow estimate for Q2 was revised down to 3.8% from 4.3%. Durable goods orders surged 7.9% in April, exceeding the 3.5% consensus. New home sales fell to 0.622 million, below the 0.665 million estimate, while initial jobless claims rose to 215K from 211K expected.
Crude oil futures settled $0.22 higher at $88.90, despite a larger-than-expected inventory draw of 3.327 million barrels. Treasury yields dipped after a $77B 7-year note auction priced at a high yield of 4.290%.