Sovereign bond update
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U.S. government bonds rose on Monday, pushing yields to lows in the previous month. A previous survey of U.S. manufacturing showed that activity growth was slower than economists expected.
Bloomberg data shows that the 10-year US Treasury bond yield fell 0.06 percentage points to 1.157% in New York trading on Monday, close to the low of 1.126% hit on July 20.
After the Institute of Supply Management stated that its purchasing managers index fell to 59.5 in July from 60.6 last month, bond yields fell, which is one of the most important indicators for setting global borrowing costs.
This indicator is based on a poll of industry executives, but is considered a strong representative of the output of the factory sector in the world’s largest economy. Ian Lyngen, an analyst at BMO Capital Markets, said that while the reading is still “very strong” — and well above the 50 line separating expansion and contraction — it suggests that “peak growth and inflation may have past”.
The disappointing data in the United States came after China issued a similar wet report. The country’s official factory purchasing managers index shows that factory activity in July increased at the lowest rate since the beginning of 2020.
“Component of [official PMI] TD Securities strategist Mitul Kotecha said that the report showed general economic weakness, weak output and new orders, and partial contraction in trade.
Prices of other sovereign bonds also rose on Monday, leading to lower yields. The 10-year British government bond yield fell 0.04 percentage points to 0.52%, and the equivalent German government bond yield fell 0.026 percentage points to minus 0.49%.
Last month, new concerns about the slowdown in US economic growth also hit the corporate credit market. According to the Bank of America’s ICE index, the lowest-rated corporate bond market experienced negative returns for the first time since March 2020.
As for the stock market, the US stock market lost momentum after the release of the ISM report. As of late in the morning, the blue-chip S&P 500 Index rose only 0.1% on Wall Street, and the Nasdaq Composite Index rose by a similar amount.
At the same time, the Chinese stock market rose after Beijing’s market regulator, the China Securities Regulatory Commission, called for measures on Sunday. Strengthen cooperation with Washington, Emphasizing the country’s efforts to increase transparency and predictability after cracking down on tuition groups Obliterate market value One of the largest companies in the $100 billion industry.
China’s listing in the U.S. has become Geopolitical flashpoint Because Beijing is trying to exert greater control over the country’s powerful technology industry.The U.S. Securities and Exchange Commission said on Friday that Chinese groups seeking to sell shares in the United States will be Subject to stricter disclosure.
China’s stock market rebounded after its worst month in nearly three years. China’s Shanghai and Shenzhen 300 Index, Shanghai and Shenzhen stocks, blue chip stocks rose 2.6% on Monday, while Hong Kong’s Hang Seng Index rose 1.1%. The Hang Seng Technology Index, which tracks major Internet groups including Tencent and Alibaba, reversed the early decline and rose 1%. European stock markets also followed the rise of Chinese stock markets, with the Stoxx 600 index rising 0.6%, setting a new intraday high.
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