Business

Treasury yields in focus after hot inflation reading


Short-term US Treasury yields continued to move higher on Wednesday as investors pored over the previous session’s impressive market path triggered by hot inflation.

Productivity per Treasury 2 years, the part of the curve that is most sensitive to Fed policy, rose 4 basis points to 3.799%. The two-year yield jumped as high as 3.834% during the session, its highest level since 2007. Tuesday’s session saw a 17-point gain.

Yields move inversely with price and basis point by 0.01%.

Meanwhile, the yield on the benchmark 10-year Treasury bond fell 1 basis point to 3.412%. Productivity per The 30-year Treasury note is down 4 basis points to 3.466%.

Kathy Jones, chief fixed-income strategist at the Schwab Center for Financial Research, said that while short-term yields appear to be driven by rising Fed expectations, longer-term yields could struggle. bounced off the highs of the year.

“When I look at long-term yields, I still don’t believe we’re going to see 10-years move much higher because all we’re seeing is an inverse trend of the yield curve,” Jones said. dominant rate.

Consumer price index report in August Tuesday showed inflation up 0.1% month-on-month. Markets had expected the index lower due to lower gasoline prices, which fell 10.6% month-on-month. The Fed’s rate hike by 75 basis points is being priced in by markets, but there are some predictions that the next rate hike could be even higher.

On Wednesday, Producer price index fell 0.1% in August, eased slightly on rising inflationary pressures, according to a report by the Bureau of Labor Statistics on Wednesday. Excluding food, energy and commercial services, core PPI rose 0.2%.

Economists had expected headline PPI down 0.1% and core up 0.3%, according to Dow Jones estimates.

Some traders are now expecting a full-blown rate hike from the US Federal Reserve at its September meeting. according to CME FedWatch tracker Fed fund futures bets. Economists at Nomura is now also looking forward to it to see the full percentage increase.

Fed will be more hawkish - 75 bps hike expected in November, says Terranova of Virtus Investment Partners

President Joe Biden, asked at Tuesday’s news conference if he was worried about the inflation numbers, replied: “No, I’m not, because we’re talking about 1/10th of 1%. .”

“The stock market doesn’t necessarily reflect the state of the economy, as you know,” Biden also said. “And the economy remains strong. Unemployment is low. Employment is growing. Manufacturing is good… I think we’ll be fine.”

Mortgage market index and mortgage applications data are due on Wednesday, as well as crude oil and gasoline stockpiles and core monthly and annual producer price indexes for August.

– Abigail Ng and Jeff Cox of CNBC contributed to this report.



Source link

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button