Traders lock in Fed bets, boosting Treasuries for fourth week
The yield on US 10-year debt edged two basis point higher to 4.04% after falling to a five-month low Thursday, but still remained on course for a fourth week of declines.
The yield on US 10-year debt edged two basis point higher to 4.04% after falling to a five-month low Thursday, but still remained on course for a fourth week of declines.
Treasuries climbed across the curve, driving two-year yields down three basis points to 3.51%. Money markets almost fully priced in three Fed reductions by the end of 2025.
In SOFR options, which closely track the Fed's policy path, a number of large positions have emerged that look to benefit from an outsized cut of 50 basis points at next week's meeting.
Investors are anticipating the annual preliminary benchmark revision of US payrolls data. Further signs of softening could further raise expectations for Fed easing.
The attention will now turn to reports on producer prices and consumer prices, due Wednesday and Thursday, for signals of how quickly the Federal Reserve will lower borrowing costs.
Debt markets globally were roiled this week as the yield on the 30-year Treasury rose to almost 5% before easing in the past two sessions.
Yields on two- to five-year notes rose at least two basis points to session highs after the U.S. economy's second-quarter growth rate was revised to 3.3% from 3%, exceeding economist expectations.
Traders boosted wagers on a quarter-point cut next month, pricing in a roughly 85% chance of a move, up from around 65% before Powell spoke.
Traders were watching a slew of data on a bigger-than-expected increased in jobless claims and expanded manufacturing Thursday.
In minutes from the Fed's July meeting, officials highlighted the risks of inflation outweighing concerns over the labor market, which investors overlooked.
While Trump's trade war has roiled markets, unnerved foreign governments and provoked criticism from leading economists, S&P affirmed its AA+ rating for the US — a score it's given since 2011.
Last year the Fed cut its benchmark rate by 50 basis points in September, and went on to lower rates twice more, even as 10-year Treasury yields rose.
Canton, a public blockchain developed by Digital Asset Holdings, allowed a standard US Treasury repurchase agreement, or repo trade, to happen outside of normal market hours.
U.S. consumers probably experienced a slight pickup in underlying inflation in July as retailers gradually raised prices on a variety of items subject to higher import duties.
Oneok plans to sell three-part, dollar-denominated senior unsecured notes while BMW is looking to price dollar-denominated debt in a four-tranche offering.
the mammoth size is also likely a harbinger of growing bill auctions ahead to help plug the federal budget deficit.
Hopes that the U.S. will reach other trade deals ahead of its self-imposed Aug. 1 deadline are mounting.
The recent rally was driven by economic data that reinforced wagers on at least two rate cuts this year, as well as speculation President Donald Trump will name a more dovish successor to Jerome Powell.
Yields across maturities declined, with those on two-year notes falling five basis points and most reaching the lowest level in more than a month.
Renewed expectations that the Federal Reserve could start cutting interest rates as soon as next month supported gains in the bond market.
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