Early last week, Yields on the 10-year U.S. treasuries fell, this is because of the sentiments about regional banks and the debt ceiling. However, in the Friday trading session, it flattened out.  

Last week was a busy week, as several new deals were disclosed. However, traders noted the low activity in the high-yield area. Trade volumes seemed low, because of the central bank's decision, and prices failed to plunge higher after the expected rate increase was disclosed 

This week, the US treasury market began on a cautious note, as investors stalled, waiting for the publication of the latest news on inflation. The inflation news is slated to be published this week.  

As of May 8th, 2023, the 2-year yield of the treasury had risen to 3.966%, and the 10-year Treasury yield increased by 5.5 basis points. The US Bureau of Labor Statistics stated that consumer prices increased by 0.7% in April, surpassing the 0.6% predicted by wall street trader journal analysts.  

Analysts interviewed by  Dow Jones indicate that the consumer price index increased by 5% last month yearly. Monthly, they predict an increase of 0.4% in profit.  

 According to the data cited from the Bureau of Labor Statistics, which shows stronger job growth in April. The job growth is higher than the predicted growth for April. This development resulted in a treasury yield surge on Friday, despite the markets being affected by the banking issues.  

With the recent development of the unemployment rate clamping down to 3.4%, lower than the initial prediction of 3.6%; the probability of the  Federal Reverse to stop its aggressive tightening campaign is low.  

The Stock Markets

This week, the stock market opened bullish, with traders showing high sentiment in confidence about the recovering economy. On Tuesday, 9th of May 2023, the Dow Jones industrials performance decreased by 0.17%, closing at 33,561.81. However, the biggest losers were the information technology sector, communication services, and the Real estate sector, down by 0.97%, 0.66%, and 0.69% respectively.  

S&P 500 index decreased by 0.46%  and closed at 4,119.17. The tech-heavy Nasdaq Composite also decreased to 12179.55 with 0.63%. Additionally, the FTSE 100 closed at 7,764.09 with a 0.18% decrease.  

Last Friday, S&P 500 index was bullish.  However, the index closed lower following the comments made by Jerome Powell, the Federal Reserve Chairman. Jerome Powell inclined that a pivot to slashing rates might not happen as swiftly as previously expected. The market sentiment also showed the Anxiety surrounding the necessity to increase the U.S. debt ceiling.  

On the downside, International Flavors & Fragrances decreased by -7% after decreasing its full-year sale estimate. Also, PayPal Holdings after releasing its first quarter data, stating about 433 million active users; closed with a decrease of more than 10%. Its initial estimate was an average of 437.6 million users. Waters also dropped to about-6% after releasing their first quarter revised EPS, which was below the investor's expectations.  

However, on the bright side, Mckesson closed with about +5% after releasing its fourth quarter revised Earnings Per Share, exceeding the trader's expectations. DaVita after reporting its first-quarter revenue closed with an increase of more than 12%, its Q1 earnings exceeded expectations and thereby increased income estimate. Also, Boeing closed on Tuesday with a 2% increase after Ryanair requested $40 billion worth of aircraft which is the 300 Boeing 737-MAX-10.  

The Forex Market  

Among the Major currencies, The British Pound ended as the strongest on Tuesday, while the Euro was the weakest.  

USD/CAD is steadily trading under 1.3400, after the news of a Canadian diplomat being dismissed from Shanghai. China proceeds to extend its removal of foreign companies that were part of the espionage activities.  

Traders are stalling, while waiting for the US CPI which will be released on Wednesday at 8:30 AM EST.  

Below are the predictions for the CPI release  

 CPI (year over year): +5.0% predicted  

 CPI (month over month): +0.4% expected  

 Core CPI (year over year): estimated growth of +5.5% 

 Core CPI (Month over month): +0.4% predicted.