(Dow Jones)–Treasury yields decline as markets absorb Friday’s payrolls data indicating a cooling, but still hot, labor market. The 10-year trades at 3.374% and the two-year at 3.945%. CPI data Wednesday are expected to show core inflation slowing a little to 0.4% in March from February’s 0.5%, while the 12-month reading ticks up to 5.6% from 5.5%, according to economists polled by WSJ. Markets are increasingly backing in a 25-basis point hike in May. “Overall, consensus remains negative with expectation of earnings
contraction, credit contraction, a [labor] market that’s a lagging indication, and recession to come,” AmeriVet’s Gregory Faranello says in a note.

By: Paulo Trevisani (paulo.trevisani@wsj.com; @ptrevisani)