US treasuries rose to intraday highs after July CPI release, steepening yield curve.

U.S. Treasury bonds rose, with short-term and mid-segment varieties leading the way. The U.S. inflation data for July, which was released earlier, roughly met expectations, leaving room for a rate cut by the Federal Reserve in September. U.S. Treasury bonds surged during the day, with yields on the 2-year and 5-year bonds falling by 4 to 5 basis points, while the long-term yields fell by about 2 basis points compared to Monday's close. This resulted in the spread between the 2-year and 10-year yields and the 5-year and 30-year yields steepening by 1 and 2 basis points, respectively. Overnight index swaps linked to the Fed meeting showed a slightly dovish tilt, with expectations of a 22 basis point rate cut in September, up from 20 basis points at Monday's close. It is expected that the remaining three meetings of the year will see a total rate cut of 60 basis points, up from the previous forecast of 56 basis points.