113 days ago

10-year Treasury #yields revisiting 2018 highs #stocks #markets #inflation #Fed

US 10-year yields are revisiting highs from late 2018, as money markets are pricing 75 basis points by the Fed's September decision, implying two 50 bps and one 75 bps rate hike, according to interest rate swaps tied to FOMC policy outcome dates. More worrying the US 2 and 10-year yields are close to inversion as the 2-year yield is close to 3.2% and 10 year is at 3.25%.

#Stocks #Bonds

151 days ago

EURUSD jumps upon Villeroy's remarks #europe #fx #trading

European Central Bank Governing Council member Francois Villeroy de Galhau said the conditions are met for interest rates to be raised back above zero by the end of this year if the euro-zone economy doesn’t suffer another setback. Money markets are pricing in a 25-point increase in July and raised bets on the pace of tightening beyond that, seeing 95 basis points by year-end. German two-year bond yields hit 0.35% following Villeroy's comments and the euro jumped against the dollar.

#Bonds #Forex

159 days ago

US GDP softer than expected #stocks #growthissues #trading

The US economy unexpectedly contracted in the first quarter, dragged down by softer inventory growth, a persistent trade deficit, and to some extent by softer consumer spending. Gross domestic product fell at a 1.4% annualised rate (vs +1.1% expectations). Many analysts consider the print "misleading" as they state that the economy is still quite strong. But should coming economic data point to a softer growth, this could push the Fed to reconsider its monetary stance.

#Stocks #Bonds

173 days ago

#China vows easing, #yields drop, #stocks recover. #markets #trading #Fed $QQQ $SPY

Sentiment is driving this market, and it's ticking up slightly after China vowed easing measures to counter the economic fallout from its lockdowns. China is expected to cut the key rate and reserve requirement ratio. Similarly, traders cut back bets the Fed will increase rates this year from 9 to 8 hikes, still expected before the year ends (for a total of 2% interest increase). Yields on the shorter end of the curve continue to fall the most. As such, long-duration assets (with cash flows well into the future, high PEs stocks etc) and crypto continued higher in the recovering market sentiment. The ECB meeting and earnings from large US banks are in focus today.


188 days ago

Yields inverted. Any impact on #stocks? #spy #yields #trading

Yields on the 2-year Treasuries briefly exceeded those on the 10-year Yesterday, a first since 2019, a sign that bond investors are pessimistic about the long-term outlook. Historically, inverting yield curve, an abnormal state, did lead to recessions in the US as Fed officials pursued an aggressive tightening policy to combat inflation. But it is important to note that the inverting yield curve by itself has not been the catalyst for a drop in equity markets. Consequently, while yesterday's move is rare in its kind, it does not necessarily represent a threat to stocks in the near term.  

#Stocks #Bonds