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9 Aug 2013
Bond markets are data dependent and teh dollar is weak
FXstreet.com (Barcelona) - On Wednesday, markets were disappointed from a damper and weaker and a vague set of guidance from the UK inflation report. The Sterling rallied while the USD is weaker across the board.
Based on the UK unemployment forecasts, in nut shell, this would mean base rates would remain on hold for three years, but this is not something Carney wanted as a headline so he wouldn’t commit to that which disappointed the markets and we saw front end guilt’s give back its gains and Sterling rally. Markets now await the BoE minutes to see if there is any further clarity there on forward guidance.
US 10 yr Tresuries eye 3pct.
Meanwhile, in the US, Treasuries were little unchanged as investors are waiting to know if the economy can withdraw the stimulus. Everything is now based on the data and there is upside potential for the 10 year yields with eyes towards the 3pct area, yielding 2.60 today. Meanwhile longer dated, such as the 30 yr is trading 3.65 pct having dropped four basis points this week. While the Fed continues to buying treasuries and mortage debt each month, interests rates will continue to feel downward pressure.
Based on the UK unemployment forecasts, in nut shell, this would mean base rates would remain on hold for three years, but this is not something Carney wanted as a headline so he wouldn’t commit to that which disappointed the markets and we saw front end guilt’s give back its gains and Sterling rally. Markets now await the BoE minutes to see if there is any further clarity there on forward guidance.
US 10 yr Tresuries eye 3pct.
Meanwhile, in the US, Treasuries were little unchanged as investors are waiting to know if the economy can withdraw the stimulus. Everything is now based on the data and there is upside potential for the 10 year yields with eyes towards the 3pct area, yielding 2.60 today. Meanwhile longer dated, such as the 30 yr is trading 3.65 pct having dropped four basis points this week. While the Fed continues to buying treasuries and mortage debt each month, interests rates will continue to feel downward pressure.