August 21, 2024
United States:
Traders Look to US Jobs Data to Support the Rally in Treasuries
Investors who’ve positioned for more gains in US Treasuries will look to revised data on the US labor market for signs the Federal Reserve needs to start aggressively slashing interest rates.
A Bloomberg gauge of Treasuries surged 1.7% this month as investors bet the US central bank will lower rates by as much as a percentage point this year, with the first move likely in September. The yield on policy-sensitive two-year notes has fallen more than 25 basis points to just below 4%.
Europe:
ECB’s Panetta Says Reasonable to Think Interest Rates Will Fall
European Central Bank Governing Council member Fabio Panetta said it’s realistic to expect that there are further interest-rate cuts ahead.
“It is reasonable to think that we are going toward a phase of loosening of monetary policy,” Panetta, who is also Bank of Italy governor, said on Wednesday in Rimini, Italy.
Asia:
Chinese Economists Urge Beijing to Borrow More to Spur Growth
A growing chorus of Chinese economists are calling on the central government to take on more borrowing to support growth as the economy continues to struggle from a lack of demand and low inflation.
Authorities should consider raising the budget deficit in a timely and appropriate manner, said Chenjie Liu, chairman of Upright Asset Management. That’s not without precedent — China made a rare revision to its deficit ratio late last year to 3.8% of gross domestic product from the original 3%.
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