Bond Yields Surge to Daily Peaks Amid Powell Event: Market Summary


The US Treasury bond market experienced a significant sell-off as investors turned to Federal Reserve Chief Jerome Powell for insights into the future of interest rates. Yields on Treasury bonds with maturities ranging from five to 20 years rose 10 basis points, while the 10-year benchmark bond reached 4.68% during a roundtable discussion with Powell. This surge in bond yields reflects traders’ increased expectations of a rate hike from the Fed in November, now seeing it as a one-in-three chance, up from the 25% likelihood priced on Friday.

The selloff in global bonds gained momentum following the US government’s temporary shutdown reprieve, as traders redirected their focus back to interest rates. The S&P 500 experienced a slight increase, and the Nasdaq 100 rose by approximately 1%. However, the overall market focus quickly shifted to interest rates, particularly due to rising oil prices that pose a threat of inflation. The rising yields prompted a retreat in oil prices, with West Texas Intermediate dropping below $90 a barrel.

The US dollar also saw gains against its major currency peers, following an impressive quarter. Additionally, gold prices slipped to seven-month lows due to the pressure imposed by surging bond yields. Amidst these monetary market fluctuations, key events to watch this week include China’s week-long holiday, a discussion on climate risk moderated by New York Fed President John Williams, and the US nonfarm payrolls report for September.

Source link

Share post:




More like this

Possible RAM configurations for Samsung Galaxy S24 and Ultra models may differ.

Samsung is gearing up to announce its new flagship...

Apple and Google choose AllTrails and Imprint as ‘app of the year,’ snubbing ChatGPT.

Apple and Google have both announced their best apps...

Releases of Remnant II & Remnant: From The Ashes on Game Pass!

Gearbox Publishing and Gunfire Games have surprised gamers by...

Bungie Withdraws Destiny 2’s $15 Starter Pack Amid ‘Pay-to-Win’ Item Backlash

Gamers have been waiting for Destiny 2's new Season...