October 22, 2024
United States:
Bonds Slump Globally as Traders Rethink Fed’s Rate Cut Path
Bonds extended losses as investors mulled the prospect of slower US interest-rate cuts, a trend that risks upending debt positions everywhere.
The selloff pushed yields on two-year Treasuries higher by as much as two basis points on Tuesday, while 10-year yields briefly topped 4.2% for the first time since July. The rate on 10-year German securities touched the highest level since early September. The rout also spread to Asia, where the yield on Australian benchmark debt surged as much as 16 basis points. US yields subsequently retreated to little-changed levels.
United Kingdom:
IMF Upgrades UK Growth Second Most in G-7, But Cautions on Debt
The IMF boosted its growth expectations for the UK by the most in the Group of Seven after the US, affirming a positive economic outlook while cautioning the new Labour government on the need to carefully manage debt.
The British economy will expand 1.1% this year — compared with a previous forecast of 0.7% in July — and 1.5% next year, the International Monetary Fund said on Tuesday as part of its World Economic Outlook. Over the two-year period, the UK is projected to be the third-fastest growing economy, behind the US and Canada.
Asia:
China’s Capital Inflow Jumps in September as Firms Shift to Yuan
Chinese companies rushed to shift money back into their home market last month as US rate cuts reduced returns on dollar assets, leading to the largest monthly capital inflow in about two years.
Last month, domestic firms sold the most foreign exchange to banks since December 2021, a sharp reversal from their large purchases of US dollars and other currencies over the past year, official data released Tuesday show. The figures also revealed a rise in foreign currency settlement for goods trade, signaling growing confidence in the yuan’s stability, and record levels of FX sales related to securities investments.
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