US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, continue to disregard the reflation woes as it recently dropped to the lowest levels since March 01.

That said, the inflation gauge dropped the most in 10 months on Monday and extended the south-run for the fourth consecutive day by Tuesday’s end of the North American trading session as it flashed a 2.65% figure at the latest.

The mismatch between the market’s inflation chatters and the aforementioned FRED data adds to the pre-CPI anxiety and weighs on the risk appetite.

It’s worth noting that the headline US Consumer Price Index (CPI) is expected to ease to 8.1% from 8.5%. However, a major focus will be on the US Consumer Price Index ex Food & Energy figures which are likely to ease to 6.0% YoY versus 6.5% prior.

Read: US April CPI Preview: Has inflation peaked?