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* The Fed cuts rates, stops balancing early * German 10-year yields have reached record lows * Chicago PMI reaches its lowest level since December 2015. * US to sell $ 84 billion in debt next week on recovery (Updates market actions, adds offer) From Richard Leong New York, July 31 (Reuters) - US Margin Short and long-term yields collapsed to their lowest level of over four on Wednesday, as Federal Reserve Chairman Jerome Powell temperate bets for more interest reductions after the central bank makes for the first time since 2008 Yields with shorter dates increase as traders scale back positions in terms of future interest reductions while longer-term yields fell to those of the Fed damped inflation and balance sheet forecasts normalization two months earlier. "The short end was no better because Powell said it was is not the beginning of a cycle of rate cuts, "said Mary Ann Hurley, vice president of fixed income in D.A. Davidson. Powell, speaking at a press conference after a two-day policy meeting, characterizes the decrease in speed as "a correction in the average cycle in politics, "there is doubt that a sharp reduction in rates is on the way. Earlier, he and other politicians decided to cut rates by a quarter percentage point. Traders are still seeing another fall in interest rates this year, perhaps comes back in September. However, Powell's remarks tilted expectations that the Fed is ready to drop more than twice next year, according to CME Group's FedWatch tool, which he evaluates interest rate futures. At the end of trading in the US, the benchmark 10-year yield from the Treasury decreased by 5.50 basis points to 2.006%. Two-year yields that are commercially sensitive & # 39; opinions on changes in Fed policy were over 1.80 basis points at 1.866% after hitting a 2-month high at 1.968%. The 2-year and 10-year part of the yield curve was narrowed to 10 basis points, the most stringent since March 22 before expanding to 13.8 basis points. The profitability in the USA was also reduced from the German one as traders suggest it is the European Central Bank ready to take more incentives to promote business and inflation in the euro area. In addition, European yields were reduced by concerns about a possible Brexit without a deal. Bund's ten-year yield reached -0.443%, a record low. While the US economy is in the middle of the longest expansion, cracks appear in the manufacturing sector and the inability of inflation to reach the Fed's 2% target. The Chicago Purchase Management Index, also known as Chicago's business barometer fell to 44.4 this month, its lowest level since December 2015 from 49.7 in June. The poor regional factory number was slightly offset better than expected reading for home private employment in July from the ADP payment processor. The US Treasury Department said so on the supply front is expected to sell $ 84 billion in coupon debt next week for its restoration in August. It will pay $ 57.3 billion proceeds from bondholders and raise $ 26.7 billion in new money. July 31 Wednesday 4:37 PM New York / 2037 GMT Price US T AROUND SEP9 155-29 / 32 41/32 10YR TNotes SEP9 127-156 / 256 9/32 Price Current net Yield% Change (BPS) Quarterly accounts 2.0275 2.0719 -0.023 Six-month accounts 2.025 2.0744 -0.014 Biennial Note 99-198 / 256 1.8661 0.018 Three-year note 99-204 / 256 1.8208 0.006 Five-year note 99-170 / 256 1.8206 -0.023 Seven-Year Note 99-202 / 256 1.9073 -0.034 10-year note 103-64 / 256 2.0075 -0.054 30-year bond 107-104 / 256 2.5199 -0.066 CURVE YIELD Last (bps) Net change (BPS) 10-year versus 2-year yield 13.80 -7.05 30-year-old vs. 5-year yield 69.70 -3.75 SPECIALS FOR THE DOLLARS Last (bps) Net change (BPS) 2-year US dollar swap 3.75 1.00 distribution 3-year US dollar swap 0.50 0.75 distribution US 5 Year Swap Swap -3.00 0.50 distribution 10-year US dollar swap -7.50 1.25 distribution 30-year US dollar swap -36.75 0.75 distribution (Report from Richard Leong Editing by Tom Brown and Chris Reese)
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