Government bonds weaken as investors bet on shrinking


Sovereign bond update

The price of U.S. and European Treasury bonds fell, and the dollar strengthened ahead of schedule Central bank A meeting that may mark the end of monetary stimulus during the crisis.

The 10-year U.S. Treasury bond yield rose by 0.05 percentage points to 1.37% as traders bet that the Fed will soon reduce the Fed’s monthly bond purchases of US$120 billion. Measures have been taken to ease borrowing costs Pandemic.

The U.S. dollar index, which tracks the trend of the U.S. dollar against six other currencies, rose 0.6%. In the stock market, the S&P 500 on Wall Street closed down 0.3%, while the technology-focused Nasdaq Composite Index was roughly flat that day.

Federal Reserve Chairman Jay Powell, Said in the speech At the Jackson Hole Central Bank Governors Summit held last month, investors are expected to start slowly reducing bond purchases later this year.Initial market Calm response, Although weekly data from the Commodity and Futures Trading Commission show that traders buy more contracts that bet on rising Treasury yields than contracts that profit from falling yields.

Even though the spread of the delta variant of the coronavirus is reaching economic growth expectations, the Fed has adopted a downsizing stance. Goldman Sachs economists said on Monday that they have lowered their forecasts for economic growth in the third quarter. U.S. economy From 6% to 5.7%.

Ross Mayfield, US investment strategist at RW Baird, said: “The timing of this move for US Treasuries is strange.” He added that the expectation that the European Central Bank will discuss control of its own monetary stimulus measures this week “may Bring some stimulus to the Fed” to further clarify the timetable for its gradual reduction.

The yield on German 10-year government bonds rose 0.04 percentage points to minus 0.33%, about the highest level since mid-July. Italy’s 10-year government bond yield rose by 0.06 percentage points to 0.75%.

The European Central Bank has been buying 80 billion euros of government and corporate bonds every month to keep borrowing costs low during the pandemic. Reduce monthly purchases About 60 billion euros.

After a brief recession last year, Eurozone economic growth The second quarter of 2021 is 2% faster than the first quarter. Compared with the same month in 2020, consumer price inflation in August reached a 10-year high of 3%.

Elisa Belgacem, senior credit strategist at Generali Investments, said the move “may have a short-term impact on market sentiment.” “But the market is fully prepared for the ECB’s cuts, and I don’t think there will be any major reactions to bond prices.”

In Europe, the regional Stoxx 600 stock index closed down 0.5%, only slightly below the all-time high set last month. The London FTSE 100 Index also closed down 0.5%.

The euro fell 0.3% against the dollar, buying 1.184 US dollars. The pound fell 0.4% against the dollar to 1.378 US dollars.

The oil benchmark Brent crude fell 0.7% to US$71.69 per barrel.

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