October CPI rose 3.7% YoY, beating the expected 3.6%, while core CPI hit 2.6%, both marking the highest levels this year.
CME data shows the probability of a rate hike in October surged from 21.6% to 43.7%.
The 5-year US Treasury yield touched its highest level since 2007 before rebounding in the afternoon bond rally.
The market-implied probability of a Fed rate hike this year has exceeded 50%.
Consequently, the US stock market saw volatile trading last night; we expect to see the true trend only later on.
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