August 30, 2024
United States:
Treasuries Slide as Data Fail to Support Jumbo Fed Rate Cut
Treasuries declined as the Federal Reserve’s favored inflation gauge reinforced the outlook for a measured pace of interest-rate cuts starting next month.
The declines on Friday pushed the yield on two-year notes, which are sensitive to central bank policy, up as much as 3.7 basis points to 3.92% after data showed a key measure of underlying US inflation rose at a mild pace and household spending picked up in July. Yields across the US curve edged higher by at least a basis point.
Europe:
ECB’s Muller Says Confidence in September Rate Cut is Growing
The European Central Bank is increasingly likely to lower borrowing costs again at its meeting next month, but what happens beyond that is less certain, Governing Council member Madis Muller said.
“We can be increasingly confident that in September, it’s possible to lower policy rates,” the Estonian central-bank chief told Bloomberg in Tallinn, citing a slower wage gains and other data that have developed broadly in line with ECB projections.
Asia:
China Steps Into Bond Market as Angst Grows About One-Way Bets
China has stepped into the nation’s government bond market, ending months of speculation that officials would act to rein in a relentless bond rally.
The People’s Bank of China sold long-dated bonds and bought short-maturity securities in a move that resulted in a net purchase of 100 billion yuan ($14 billion) of debt in August, according to a statement on its website. The trades may help curtail aggressive gains in the nation’s bonds that have pushed benchmark yields to a record low as investors bet the central bank will ease monetary policy to support growth.
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