Treasuries extended their drop after Friday’s blowout employment report strengthened speculation that the Federal Reserve is poised to pause its interest-rate cuts for virtually all of this year.
Dollar bulls emboldened by Donald Trump’s win are entering a month that has historically punished the greenback.
The US dollar’s rally is gaining momentum alongside Donald Trump’s threat of sweeping tariffs, leaving currency strategists in agreement it has further to rise while war-gaming just how far it will go.
Treasuries fell as a strong report on services ahead of Thursday’s Federal Reserve interest-rate decision added to volatility around the US election.
Treasury yields fell sharply and the dollar weakened as investors pared bets on Republican Donald Trump prevailing in Tuesday’s US election.
The sharp selloff in Treasuries abated on Thursday, with US bonds rallying alongside European peers, after three straight days of declines.
The rout in US government debt extended slightly on Tuesday, with longer-dated yields at the highest levels since late July and inflation data later in the week expected to enable Federal Reserve interest-rate cuts.
The euro’s August gains have been relentless, taking it to a one year high against the dollar on Wednesday, but a cautious tone from Federal Reserve Chair Jerome Powell on Friday could turn that momentum around.
Citigroup Inc. says the carry trade is back, but with a key difference: hedge funds are borrowing US dollars rather than the yen for their wagers on emerging markets.
Idanna Appio spent 15 years at the Federal Reserve Bank of New York analysing the history of sovereign debt crises. Now, as a fund manager at the $138 billion First Eagle Investments, she’s reached a conclusion: US Treasury bonds are too risky to hold.
They subdued stocks, claimed a chunk of foreign exchange and muscled into the commodity market. Now high-tech trading firms like Citadel Securities LLC and Jane Street are pushing deeper than ever into fixed income.
Investors in US Treasury debt are bracing for another auction, after sales of two- and five-year notes drew only middling demand — despite yields near the highest levels of the year.
Treasuries rallied along with global bonds, sending benchmark yields to multi-month lows, as traders bet the world is entering a new, disinflationary period by wagering on more interest-rate cuts next year.
The dollar will surprise by getting stronger next year as the US economy outperforms, according to some of the world’s biggest money managers.
Surging oil prices are set to power the next leg of the dollar rally, as the US economy benefits from its rise as an energy exporter.
Some of the world’s biggest asset managers are buying up European corporate bonds — seeing the region as a safer bet as turmoil engulfs US regional banks.
Sometimes when volatility jolts financial markets, the safest trades can quickly morph into dangerous bets.
