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? 10-year Treasury yield up ahead of U.S. CPI.
? North Korea pledges to work toward complete denuclearization.
? Euro, sterling strengthen; yen slips against dollar.
? European equities fall after gains in Asia.
The yield on 10-year Treasury bonds edged higher ahead of U.S. inflation data which looks set to further cement expectations of a rate hike from the Federal Reserve on June 13. European equity markets fell as trade worries lingered, failing to track a rise by Asian markets buoyed by the U.S.-North Korean summit. The yen slipped while the euro gained against the dollar, and futures pointed to the S&P 500 opening slightly lower.
The 10-year Treasury yield added 2 basis point to 2.969% by 6:54 a.m. ahead of the CPI reading, which is expected to come in at an annual 2.8% on the back of higher fuel costs, according to ING Research.
"Any upside surprises will only add to fears that the [Federal Reserve] adopts a more hawkish stance tomorrow and probably triggers yield-curve flattening and dollar strength," ING added separately.
The Federal Open Market Committee's two-day meeting is set to begin June 12, with a 25-basis-point hike in the Fed's benchmark rate expected June 13. U.S. small business optimism rose for an 18th straight month, a survey showed.
The FTSE 100 fell 0.27% and the Euro Stoxx 50 slipped 0.17%. Earlier, the Shanghai SE Composite gained 0.89%, and Japan's Nikkei 225 index closed 0.33% higher in the wake of U.S. President Donald Trump's meeting with North Korean leader Kim Jong-un in Singapore.
The two leaders pledged to work toward the "complete denuclearization of the Korean peninsula" and hold follow-up negotiations to implement the summit's accords, though further details were scant. Sanctions on North Korea will remain but joint military exercises between the U.S. and South Korea will be halted, Trump told reporters after the summit.
"The positive outcome of today's historic summit will likely translate into structurally eased geopolitical risk and in turn a growing prospect of economic cooperation in the North Asia region, led by South Korea," Société Générale said. Despite this, investors will focus more on Trump's trade spat with the European Union and other allies following the G-7 summit.
The yen slipped 0.18% and the South Korean won was down 0.25% against the dollar. The dollar was little changed against the euro and sterling.
"We sense the market mood is shifting once again as the [dollar's] streak of good luck looks likely to roll over in the face of stretched positioning, trade tensions and the return of the Trump discount," TD Securities wrote.
The yield on 10-year German Bunds rose by 2 basis points to 0.513% as investors awaited the European Central Bank's meeting on June 14, though analysts do not foresee any announcement of an end date for the bank's bond-buying program just yet. German economic sentiment fell to its lowest level in more than five years, the ZEW survey showed.
"It would be unusual for the ECB to firmly commit itself to a future course of action (stopping asset purchases at the end of 2018) six months ahead of time," Holger Schmieding, chief economist at Berenberg Bank, wrote in a research note.
Italian bonds rose after Finance Minister Giovanni Tria reassured that there is no discussion to leave the euro, pushing 10-year yields down by 3 basis points to 2.809%.
Brent crude fell 0.30% on the ICE Futures Exchange to $76.23 per barrel.
Gold slipped 0.1% to $1,301.80 per ounce.
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The day ahead:
U.S. Federal Open Market Committee meeting begins
8:30 a.m. ET — U.S. consumer price index (Econoday consensus: 0.2% monthly, 2.8% yearly)
8:55 a.m. ET — U.S. redbook
2 p.m. ET — U.S. Treasury budget (Econoday consensus: $144 billion deficit)

