US bond traders are turning their attention to inflation data to determine whether there is still hope for a rate cut by the Federal Reserve in September.

US treasuries traders will closely monitor the inflation data released on Thursday, looking for signs that price pressure continues to exist in order to determine whether the Fed will maintain interest rates at a higher level for a longer period of time. US treasuries recovered some lost ground from Wednesday; the Fed kept interest rates unchanged overnight, with Chairman Jerome Powell suggesting that investors may need to wait longer for the first rate cut of the year. Expectations for a rate cut in September in the currency market have been significantly reduced from 80% to 40%.