Inflation Report in Focus as Markets Brace for More Volatility

September CPI report expected to show inflation remains elevated, raising chance of another Fed rate hike this year. Models suggest inflation may run hotter than forecasts.

Treasury bond auctions this week important given recent volatility across yield curve. Weak auction could ignite further rise in rates.

Bond market volatility translating to equity market weakness as stocks trade with volatility and credit spreads.

Job report initially sent rates sharply higher, sparking stock selloff. Rates pulled back as volatility decayed, lifting stocks.

Trend of higher rates likely persists given Fed policy, yield curve shape, rise in term premium and potential BOJ shift.