Investors should prepare for lower US interest rates, UBS says
Dow modestly higher; S&P 500 falls, Nasdaq slides ~1.5%
Energy leads S&P 500 sector gainers; Tech down most
Euro STOXX 600 index up ~0.45%
Dollar edges red; gold up slightly; crude dips; bitcoin off >1%
U.S. 10-Year Treasury yield edges down to ~4.16%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
INVESTORS SHOULD PREPARE FOR LOWER US INTEREST RATES, UBS SAYS
Investors should begin positioning for lower U.S. Treasury rates as market expectations for a September rate cut by the Federal Reserve have continued to push yields lower, according to UBS analysts led by Solita Marcelli.
Over the past week, the yield on the two-year note US2YT=RR fell around 12 basis points, while that of the 10-year note US10YT=RR dropped 4 basis points as investors foresee an imminent rate cut supported by data showing a slowdown in inflation, the analysts said.
The gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectation, was at a negative 21.0 basis points on Tuesday.
UBS now forecasts that the yield on the 10-year Treasury note will to fall to 3.5% by mid-2025, as the Federal Reserve shifts to monetary policy easing, despite "term-premium" volatility amid the uncertainty from the upcoming U.S. election and the fragile fiscal position of the federal government with growing deficits.
The Federal Reserve is widely anticipated on Wednesday, at the end of its two-day policy meeting, to keep its benchmark overnight rate in the 5.25%-5.50% range for an eighth straight meeting.
"In our view, the US central bank may use its meeting this week to set the stage for this shift, following recent public remarks by policy makers, including Fed Chair Jerome Powell, suggesting that rate cuts are on the horizon," the analysts said.
(Chibuike Oguh)
*****
FOR TUESDAY'S EARLIER ON LIVE MARKETS:
DATA ROUNDUP: SOFTENING JOBS MARKET, CHEERIER CONSUMERS, ETC - CLICK HERE
U.S. STOCKS CAUTIOUS AHEAD OF TECH EARNINGS, FED RESULT - CLICK HERE
CAN FOUR FANGS FEND OFF A FURTHER NASDAQ FLOP? - CLICK HERE
MARKETS TOO OPTIMISTIC AHEAD OF UNCERTAIN H2 - NATIXIS IM SURVEY - CLICK HERE
EUROPE INC EARNINGS: 40% LOADED... - CLICK HERE
AUTOS TRY TO CHANGE GEAR, TECH UP, MINERS DRAG - CLICK HERE
EUROPEAN FUTURES MIXED, UK EARNINGS FLOW IN - CLICK HERE
OIL SLIPS AND EQUITIES EASE IN PRE-FED DRIFT - CLICK HERE
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
