Yields slip ahead of Powell's Friday speech
Updates as of 1437 ET
By Alden Bentley
NEW YORK, Aug 19 (Reuters) -Yields on U.S. government debt eased on Monday as the market counted down to Federal Reserve Chair Jerome Powell's keynote speech at the Jackson Hole symposium at the end of the week.
There is little in the way of data to divert attention before then.
The Conference Board said on Monday its leading economic index fell 0.6% in July. That was worse than June's 0.2% fall and the 0.3% decline expected by economists polled by Reuters. But the index is a secondary indicator and Treasuries stayed in their narrow ranges.
On Wednesday, the Labor Department will release a preliminary revision to 2024 payrolls through March, potentially a market factor if it shows a much different labor picture than the Fed has been banking on as it moves toward cutting interest rates.
Flash PMIs, July home sales and weekly unemployment claims round things out on Thursday but, barring big surprises, are unlikely to upset markets.
The minutes of the Fed's July meeting will be released on Wednesday, which will be backward looking when investors are 100% focused on what the Fed will do at its Sept. 17-18 meeting.
"It's super benign. The curve has barely moved, you are not seeing much happening in peripheral things like swap spreads and inflation expectations," said Jan Nevruzi, U.S. rates strategist at TD Securities in New York.
High rates may be on the way out, and Powell could provide more information about the approach to policy easing in his Friday speech at the Kansas City Fed's annual conference in Wyoming.
Fed speakers in recent days have laid the groundwork for Powell's Jackson Hole remarks.
In an interview with the Financial Times published on Sunday, San Francisco Federal Reserve Bank President Mary Daly said it is time to consider adjusting borrowing costs from their current range of 5.25% to 5.5%.
Minneapolis Fed President Neel Kashkari said the debate about potentially cutting rates in September is an appropriate one to have because of a rising possibility of a weakening labor market, the Wall Street Journal reported on Monday.
"The balance of risks has shifted," Kashkari told the Journal in an interview conducted on Friday.
"The interesting things of the week will be the (Fed) minutes and then the benchmark revision on payrolls, both on Wednesday, and of course Powell on Friday morning," said Lou Brien, market strategist at DRW Trading in Chicago.
Based on the fed funds futures 0#FF: term structure, traders see about a 78% chance of a 25 basis points easing of the policy rate, which has been in its current target range since the Fed stopped hiking rates in July 2023.
"On the one hand, Powell could just confirm what almost everyone already assumes: The Fed will cut rates next month. On the other hand, he could feel no compulsion to confirm it when there is still employment and inflation data to be released before the Sept. 18 decision," Will Compernolle, macro strategist at FHN Financial said in a client note on Monday.
The yield on the benchmark U.S. 10-year note US10YT=RR fell 2.8 basis points from late Friday to 3.864%.
The two-year note yield US2YT=RR, which typically moves in step with interest rate expectations, fell 0.4 basis point to 4.0618%.
The 30-year bond US30YT=RR yield fell 4 basis points to 4.1114%.
The closely watched gap between yields on two- and 10-year Treasury notes US2US10=TWEB, considered a gauge of growth expectations, was at negative 20 bps, a bit more inverted than Friday's negative 17.1 bps.
The implied breakeven inflation rate on 10-year Treasury Inflation Protected Securities (TIPS) US10YTIP=TWEB was slightly higher at 2.0712%.
The five-year TIPS US5YTIP=TWEB breakeven inflation rate slipped to 1.9607%, suggesting that investors think annual inflation will average below the Fed's 2% target rate for the next five years.
Reporting by Alden Bentley; editing by Jonathan Oatis
免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。