Recently, with the rising interest rate of U.S. bonds, many people are concerned about the question, that is, will the 10-year U.S. Treasury rate break through the previous high of 4.34%? In particular, today's 10-year U.S. Treasury interest rate has actually broken through to 4%, which has also set a new high in the U.S. bond market this year.
In the Asian market on Tuesday (July 11), the latest price of the dollar index was 101.72, and the opening price was 101.90. The 10-year U.S. Treasury yield closed down 5BPs to 4.01%, the 2-year U.S. Treasury yield fell 9BPs to 4.85%, and the inversion of the 2-year and 10-year U.S. Treasury yield spread has gradually converged this month, unlike some time ago, the inversion of the two sides is very serious, people can't help but be scared, is the US recession coming? Because on July 3, the spread between the two sets a multi-year record of 108BPs.
One
U.S. Treasury yields have generally fallen recently, while the inversion of a key part of the yield curve has narrowed, as everyone is waiting for the release of US CPI data for June this Wednesday, tomorrow, if price pressures continue to slow down, then it is good news for the US itself, if it continues to grow, then the problem may be continued to raise interest rates to tighten inflation.
However, from many indications, this Wednesday's "U.S. CPI night" may be expected to bring good news, because the yields of all maturities in the U.S. bond market have fallen overnight, especially among them are leading the decline in short-term bond yields, which rose sharply some time ago.
Today, the 2-year yield has fallen 8.9 basis points to 4.87%, while the 5-year yield is down 12.2 basis points at 4.244%, the 10-year yield is down 6.6 basis points at 4.006%, and the 30-year yield is down 1.3 basis points at 4.037%. You know, last week, the most sensitive 2-year U.S. Treasury note hit a record level since 2007, touching 5.12% interest rate, and now it has fallen below 5% interest rate. Today, these data are still falling.
According to the Fed's plan, then it may announce another rate hike later this month near the end of the month, although the non-farm payrolls growth in the June employment report released in the United States fell below expectations for the first time in 15 months, but in terms of wages, the pace of wage growth in the United States remains high.
In response to these problems, some analysts said that in this state, will the Fed continue to raise interest rates? Will it also make the Fed stop raising interest rates? If this trend continues, is the US economy starting to weaken, and we will soon see signs of a recession in the US?
On Monday, a number of Fed officials in the United States said that they would need to raise interest rates further before they could return inflation to the central bank's 2% target. Moreover, San Francisco Fed President Daley also said that there may be two more interest rate hikes this year to really return inflation to a sustainable 2% level, and then Cleveland Fed President Mester also said that his view is also the median estimate of 2 interest rate hikes this year.
Two
For the U.S. bond market, many investors are waiting for Wednesday's "U.S. CPI night" to solve their urgent needs, after all, for U.S. bond bulls, the recent defeat has caused them to lose a lot.
Moreover, in the near future, there has been a lot of information that has come in, including the sharp drop in second-hand car prices, the largest monthly decline since the epidemic; There is also good news in terms of US consumers' expectations of inflation, which is now down 3 percentage points from last year's high of 6.8%.
However, U.S. bond yields continued to remain high, affecting the international gold market, especially last week, gold prices even because the June non-farm payrolls employment report weaker than market expectations, caused the dollar index to fall sharply, while gold rebounded, once touched a high of $1934.68 / oz.
In the global market, there are many different views on U.S. debt, especially because the dollar and oil are linked, the United States in order to ensure the status of the dollar, want to issue a bill called NOPEC, on the one hand, this bill will curb the OPEC + 23 oil-producing countries international crude oil pricing power and discourse power, but also try to allow the U.S. Treasury or related agencies to confiscate a series of global oil countries in the United States or some of the United States allies.
Once this bill is successful, the United States can continue to harvest wealth around the world through dollars and US debt, because this is also a way to relieve the pressure on the US domestic economy.
This has also led to central banks and overseas investors around the world are reducing their holdings of U.S. bonds, especially basically in addition to Japan, which holds the most U.S. bonds, many countries are accelerating the liquidation of U.S. bonds, although they may not reduce their holdings much, but they are still slowly reducing their holdings.
If the United States shows another inversion in the interest rate of US bonds, or even a recession, will anyone still hold these US bonds?