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- U.S. 10-year Treasury yield edges closer to 5%.
- Oil prices are higher, with both Brent and WTI at triple-digit levels.
- U.S. August CPI data released on Friday is a key market inflection point.
- Odds that the Federal Reserve will hike rates next week jump to 70%.
- ECB hiked rates to 2.5%
Traders work on the floor of the New York Stock Exchange during afternoon trading on Sept. 3, 2026 in New York City. Michael M. Santiago | Getty Images
Hello, this is Leonie Kidd coming to you from London. Welcome to another edition of CNBC’s Daily Open.
Investors find themselves trapped between two major market forces. A bond market that refuses to be tamed by intervention, and a resurgent crude price that has broken back into triple digits across both benchmarks.
The common denominator: inflation. And on Friday, that gets more interesting with key inflation data due to be released stateside.
Read on for more.
What you need to know today
The 10-year U.S. Treasury yield is a breath away from 5%. It currently sits at its highest level since November 2023, despite the Treasury Department’s intervention to buy back $6 billion of long-term debt.
But Treasury Secretary Scott Bessent is defiant, telling Steve Bannon’s podcast that any accusations that the operation hasn’t worked are “nonsense.”
At the same time, oil prices are surging. West Texas Intermediate crude futures have jumped to over $100 per barrel, while international Brent crude futures posted its highest settlement price since May 19. That’s double-digit percentage gains for the week.
Inflection point
Rising concern about inflation is driving the moves, and data on Friday could exacerbate that. A Dow Jones forecast suggests that CPI inflation data will show goods and services costs rose 0.4% in August, taking the annual inflation rate to 3.4%.
Friday’s inflation data will also be the last key piece of information the Federal Reserve will get ahead of its policy meeting next week.
The odds that the Fed will choose to hike benchmark rates next week have now risen to over 70%. In addition, the market now views a second increase before the end of the year as a possibility.
ECB hikes
On Thursday, the ECB opted to hike rates to 2.5% as policymakers battled to contend with rising prices and surging government borrowing costs.
The central bank cited “risks to the upside for inflation and to the downside for economic growth.”
For more on that decision, CNBC’s “Squawk Box Europe” spoke exclusively to Bundesbank President Joachim Nagel, watch that interview here.
— Leonie Kidd
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