8/23/2019, 11:12 AM (Source: TeleTrader)
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Treasuries drop before Powell's speech

As stocks were favored by investors on Friday and Wall Street was flashing green before the opening bell, prices of United States sovereign debt dipped. The retreat in Treasuries, which translates to a jump in yields, could be attributed to repositioning before the keynote speech of Federal Reserve Chair Jerome Powell at the central banking symposium in Jackson Hole, Wyoming. Several members of its rate-setting committee have expressed caution regarding market expectations of further easing and stressed they would decide according to incoming data.

Traders were also upbeat about equities upon an unconfirmed report that unnamed European Union officials are suggesting to start a €100 billion fund for support to domestic corporations, though with the intention to counter the growing influence of rivals including Apple, Alphabet, Alibaba and Tencent.

The two-year US yield gained 2.4 basis points to 1.647% and the ten-year rate jumped 3.5 points to 1.651% at 5:11 am ET. The closely watched section of the yield curve inverted yesterday for the third time in several days just before closing but then steepened again. The spread remained marginal amid recession fears and the pressure from a global economic slowdown and central bank purchases. The yield on the thirty-year bonds grew by 3.3 points to 2.138%. Equivalent futures slipped 0.05%, 0.2% and 0.4%, respectively. German and British government bonds also retreated.

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