10-Year U.S. Treasury Yields Consolidate Losses After Lowest Daily Close Since February

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  • 10-year US Treasury yields show a two-day downtrend near July lows.
  • Yields closed near a multi-day low after US ISM data, comments from the CDC amplified concerns about Delta’s covid variant.
  • The reduction in the weight of US bonds by the world’s largest pension fund is on top of the low yields on Treasury bonds.
  • Talks over US infrastructure spending, the IMF’s historic supplement to SDRs, defend bond bears.

After a dismal start to the week, market sentiment improved during Tuesday’s Asian session. While describing the mood, 10-year US Treasury yields add 1.8 basis points (bps) to flash the coupon rate of 1.18% at time of release.

The risk barometer fell to its lowest since July 20, also printing the lowest daily close since February, the day before amid escalating virus issues and negative US data.

Low activity figures for the world’s two major economies, namely the United States and China, have raised questions about recovery measures after the pandemic. Beijing’s official gauge marked the slowest expansion in 17 months, followed by the declining Caixin manufacturing PMI, while the US ISM manufacturing PMI fell to 59.5, from 60.9 expected and 60.6 readings previous ones, during the period indicated.

In addition, the United States Centers for Disease Control and Prevention (CDC) pointed out that the Delta variant of the virus was “probably more serious” than previous versions, according to an internal report released Friday, Reuters said. On a related note, the reintroduction of local blockages in China and Australia’s hardships due to the COVID-19 strain are also amplifying the woes of the virus.

Alternatively, US senators are hopeful that the long-awaited stimulus will be adopted during this week. In addition, the International Monetary Fund (IMF) announced the historic allocation of $ 650 billion to its Special Drawing Rights (SDRs) on Monday evening.

Amid those games, S&P 500 futures are rising 0.25% after a weak start to the week on Wall Street, while Asian stocks are trading mixed at press time.

Looking ahead, market players will be keeping an eye on virus updates and news from the US Senate for further impetus in a light schedule. However, pre-NFP caution could limit volatility.

Read: Forex Today: The Dollar Weak Before Leading Events


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