- The 10 -year performance of the United States falls 6 basic points to 4,448% while bond auctions attract a strong demand.
- The Ministry of Finance of Japan survey to the market in the midst of concern for peaks in long -term yields.
- The market looks at five -year notes for 70,000 million dollars and seven years for 44,000 million dollars later this week.
The US treasure yields fall throughout the curve due to concerns about an increase in the supply of global government debt, which caused the yields to rise last week, although something were retracted from the expectations that Japan could begin to issue short -term debt.
Treasury yields go back while Japan considers changes in debt issuance; solid auction to two years calm the nerves by the rates driven by the offer
Global yields were pressed since Japan, through the Ministry of Finance, sent a questionnaire to market participants on Monday night he asked about their opinions about the broadcast and current market situation, according to Bloomberg.
The increase in yields at the long end of the curve keeps the Japanese government worried, after the performance in the 20 -year bonds reached historical maximums last week.
The debt auctions from the US Treasury Bonds were well received by market participants. According to Reuters, “the two -year auction reached a maximum yield of 3,955%, approximately nine basic points below the market at the time of the deadline for the tender.”
The US Treasury sold $ 69,000 million in two -year -olds, the first of three auctions this week. More auctions are expected, with the treasure projecting to issue 70,000 million dollars in notes at five years and 44,000 million dollars in notes to seven years, which expire respectively on Wednesday and Thursday.
Meanwhile, US debt yields retreated considerably on Tuesday. The performance of the 2 -year note from the US, the most sensitive to changes in interest rates, fell a basic point (PB) to 3,977%.
The 10 -year Treasury Note from US Treasury fell six basic points up to 4,448%, although market participants remain skeptical that the Federal Reserve reduces rates in the first half of the year. The first rate cut is expected to be in September, after Jackson Hole’s symposium in August.
The US consumer confidence data improved in May, revealed the Board Conference (CB). The requests for durable goods in April fell by -6.3% intermensual after an increase of 7.6% in March.
10 -year performance of the US vs. Fed fund rate relaxation expectations for December 2025
US interest rates
Financial institutions charge interest rates on loans to borrowers and pay them as interest to savers and depositors. They influence the basic types of interest, which are set by central banks based on the evolution of the economy. Normally, central banks have the mandate to guarantee the stability of prices, which in most cases means setting as an objective an underlying inflation rate around 2%.
If inflation falls below the objective, the Central Bank can cut the basic types of interest, in order to stimulate credit and boost the economy. If inflation increases substantially above 2%, the Central Bank usually rises the interest rates of basic loans to try to reduce inflation.
In general, higher interest rates contribute to reinforce the currency of a country, since they make it a more attractive place for world investors to park their money.
The highest interest rates influence the price of gold because they increase the opportunity cost of maintaining gold instead of investing in an asset that accrues interest or depositing effective in the bank.
If interest rates are high, the price of the US dollar (USD) usually rises and, as gold quotes in dollars, the price of low gold.
The federal funds rate is the type to a day that US banks lend each other. It is the official interest rate that the Federal Reserve usually sets at its FOMC meetings. It is set at a fork, for example 4.75%-5.00%, although the upper limit (in this case 5.00%) is the aforementioned figure.
Market expectations on the interest rate of the Federal Reserve funds are followed by the Fedwatch of the CME tool, which determines the behavior of many financial markets in the forecast of future monetary policy decisions of the Federal Reserve.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
