Tuesday , March 21 2023

Government Securities other than the United States. the yield curve evens out when the Fed Powell cools down at a reduced rate


                * 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
US T AROUND SEP9 155-29 / 32 41/32
10YR TNotes SEP9 127-156 / 256 9/32
Price Current net
Yield% Change
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
10-year versus 2-year yield 13.80 -7.05
30-year-old vs. 5-year yield 69.70 -3.75
Last (bps) Net
2-year US dollar swap 3.75 1.00
3-year US dollar swap 0.50 0.75
US 5 Year Swap Swap -3.00 0.50
10-year US dollar swap -7.50 1.25
30-year US dollar swap -36.75 0.75

(Report from Richard Leong
Editing by Tom Brown and Chris Reese)
Our standards:The Thomson Reuters Trust Principles.
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