Notizie economiche
16.08.2024

US bond yields are showing negative dynamics

U.S. Treasury bond yields have declined moderately, while market participants are preparing for the publication of new U.S. data that will help clarify the state of the economy.

The yield on 5-year Treasury bonds fell by 3.0 basis points, reaching 3.769%, while the yield on 30-year bonds was 4.157% (-2.3 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, fell by 2.6 basis points to 4.075%, while the yield on 10-year bonds fell to 3.896% (-3.0 basis points). The curve between the 10-year Treasury yield and the 2-year yield remains inverted, sending a warning that the economy may be falling or has already fallen into recession. Now the gap between 10 and 2 year U.S. debt is 18 basis points.

Yesterday's US retail sales data pointed to the resilience of consumer spending, which eased fears of a recession or economic slowdown. In addition, another drop in initial jobless claims has reduced concerns about the state of the labor market. A rate cut in September was last firmly priced in by markets, boosted by inflation data released this week. According to the CME FedWatch Tool, markets see a 27.5% probability of a 0.5% rate cut in September (down from 36% yesterday), and a 72.5% probability of 0.25% rate cut (up from 64.0% yesterday).

Today, investors will focus on housing market data for July (building permits and housing starts), as well as the Reuters/Michigan consumer sentiment index for August. Comments by Fed Chair Jerome Powell at the central bank's Jackson Hole Economic Policy Symposium on Aug. 22-24 will also be important for market participants.

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