7/19/2018, 4:42 PM (Source: TeleTrader)
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US yield curve goes flatter while Treasuries rise

The dollar continued to surge on Thursday, gaining across the board on upbeat economic data in the United States and determination by Federal Reserve Chair Jerome Powell to maintain the regime of a gradual increase in interest rates. Short-term yields, more sensitive to policy change, went slightly lower, while government debt with longer maturity increased in price on the market, pushing yields deeper into negative territory.

The reduction in spreads between the interest rate indicators, the so-called flattening of the yield curve, concerns some investors as inversion has in most historical cases preceded a recession. Stocks in New York dropped, as did precious metals and commodities, turning market participants to the relative safety of bonds, although oil strengthened.

The yield on the two-year US note declined 0.8 basis points to 2.601% and the 10-year notes yielded 2.853%, a drop of 1.7 points. The gauge for 30-year Treasury bonds was down 1.6 points at 2.969%. Equivalent futures contracts rose 0.01%, 0.09% and 0.22%, respectively. Earlier, the one-year yield rose to 2.43%, unseen since June 2008.

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