US TREASURY YIELDS HOLD STEADY AS INFLATION HITS 2023 HIGH

United States Treasury yields were flat in early Thursday trading after May's consumer price index rose 0.5% month-on-month and 4.2% year-on-year, the fastest annual pace since 2023. The figure marked an increase from April's 3.8% reading and came in line with market expectations. The 10-year Treasury yield held at 4.5384%, the 2-year note sat at 4.1288%, and the 30-year yield was static at 5.0200%. President Donald Trump told reporters he loved the inflation figure and stated separately that inflation would fall sharply once the conflict with Iran was resolved.

Traders are now awaiting May's producer price index data from the Bureau of Labour Statistics, with consensus estimates pointing to a month-on-month rise of 0.7%. Oil prices reversed earlier gains on Thursday, with West Texas Intermediate futures falling 0.9% to $89.24 per barrel and Brent crude slipping more than 1% to $92.14. The moves followed a volatile overnight session driven by developments in the Middle East. US missiles struck multiple targets in Iran, Kuwait temporarily closed its airspace citing Iranian aggressions, and Israel alerted northern communities following projectile strikes from Lebanon.

European stocks were broadly flat as the US inflation data offered some reassurance to investors. Attention across markets shifted towards the European Central Bank's forthcoming policy decision. The ECB meeting represents the next major scheduled event for investors to assess the direction of interest rates in the eurozone. Bond markets had steadied during Wednesday's session following the initial release of the consumer price index figures.