U.S. core inflation unexpectedly cooled in May, with traders still betting on a rate hike by the Fed before year-end

Odaily Planet Daily reported that the U.S. core CPI rose 0.2% month-on-month in May, lower than the market expectation of 0.3%. U.S. Treasury bonds strengthened slightly, and bond traders maintained their bets that the Federal Reserve will raise interest rates before the end of the year. The data is seen as relieving some pressure on the Fed ahead of Kevin Warsh's first meeting as Fed Chair next week.

After the CPI release, most U.S. Treasury yields fell by less than 1 basis point. The two-year Treasury yield, which is more sensitive to short-term changes in monetary policy, stood at 4.11%, down from around 4.13% earlier in the session. Dan Carter, senior portfolio manager at Fort Washington Investment Advisors, said: "This gives the Fed a little breathing room." (Jin Shi)