January 21, 2015 / 5:29 PM / 3 years ago

U.S. TIPS breakeven rates rise on central bank moves

NEW YORK, Jan 21 (Reuters) - The U.S. bond market’s measures on inflation expectations rose on Wednesday following a surprise interest rate cut from the Bank of Canada and reports that the European Central Bank would embark on a large stimulus plan.

Analysts and traders reckoned these central-bank moves would counter the growing deflation risk from falling oil prices and soft global demand.

The five-year TIPS breakeven rate, which measures investors’ short-term inflation expectations, was last at 1.24 percent, up 3.7 basis points from late on Tuesday and the highest in nearly six weeks, according to Tradeweb.

The 10-year TIPS inflation breakeven rate, a gauge of investors’ longer-term inflation outlook, was 1.64 percent, up 3.3 basis points from late on Tuesday and the highest in three weeks.

Reporting by Richard Leong; Editing by Alden Bentley

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