The US interest rate market was in a clear decline on Tuesday after investors received good news about the schedule of interest rate cuts.
The head of the central bank, the Fed Jerome Powell said on Monday that inflation is approaching the central bank’s 2 percent target, but did not want to speculate yet on the exact timetable for interest rate cuts.
Powell’s comments drove the interest rate market in a different direction compared to Monday, because yesterday especially long-term interest rates were rising the presidential candidate Donald Trump’s in the aftermath of an assassination attempt.
Investors’ interest will also focus on US retail sales figures for June, which will be released later on Tuesday. However, the forecast of stagnant retail sales and easing inflation convinces investors that interest rate cuts would be coming sooner rather than later. The market is pricing in the first Fed rate cut for September.
Among long-term interest rates, the US 10-year bond yield was down 5.1 basis points at 4.179 percent on Tuesday. Among the shorter interest rates, the US 2-year bond yield was at 4.419 percent.
In Europe, interest rates are also falling, like in the United States.
The German 10-year bond rate was down 4.6 percentage points at 2.423 percent on Tuesday afternoon, and the 2-year bond rate was down 4.7 percentage points at 2.740 percent.
Britain’s 10-year bond rate was down 4.9 percentage points at 4.051 percent, and the 2-year bond rate was down 7.1 percentage points at 3.957 percent.
In the foreign exchange market, the yen has weakened slightly compared to other major currencies.
At 14:29, the euro fetched 1.0898 dollars, 172.65 yen, 0.8406 pounds or 11.561 Swedish kronor. The dollar was 158.45 yen and the pound was 1.2964 dollars.
Source: www.arvopaperi.fi
