Treasury Yields Fall
The US 10-year Treasury yield fell 5bps to 5.19% on Tuesday, retreating slightly from the 24-year highs touched earlier this month, as traders returned from a long weekend amid rising safe-haven demand and falling oil prices. Weakness in the tech sector, particularly semiconductor and chip stocks, amid renewed concerns over the AI trade, spread globally, prompting investors to seek safer assets. Meanwhile, oil prices declined after a three-day winning streak, providing additional support to the bond market. Investors are also awaiting key US inflation data this week, including Wednesday’s CPI report, for further clues on the trajectory of inflation and the Fed’s next policy steps. Meanwhile, traders have scaled back bets on another 25bps rate hike this month, with the probability of such a move currently standing at around 19%. For December, markets are pricing in a nearly 72% chance of a 25bps increase in the fed funds rate.
19% on Tuesday, retreating slightly from the 24-year highs touched earlier this month, as traders returned from a long weekend amid rising safe-haven demand and falling oil prices. Weakness in the tech sector, particularly semiconductor and chip stocks, amid renewed concerns over the AI trade, spread globally, prompting investors to seek safer assets. Meanwhile, oil prices declined after a three-day winning streak, providing additional support to the bond market. Investors are also awaiting key US inflation data this week, including Wednesday’s CPI report, for further clues on the trajectory of inflation and the Fed’s next policy steps.
Meanwhile, traders have scaled back bets on another 25bps rate hike this month, with the probability of such a move currently standing at around 19%. For December, markets are pricing in a nearly 72% chance of a 25bps increase in the fed funds rate.