- The 10 -year -old American treasure performance is maintained after the recent increase; The treasure will auction 39,000 million dollars in bonds at 10 years and 22,000 million in bonds at 30 years later this week.
- The DXY falls 0.31% to 99.47, without following the increase in yields in the middle of an expanding commercial deficit and the caution of the Fed.
- Markets discount a Fed rates cut in July and two more by the end of the year; Attention at the Powell FOMC meeting.
The 10 -year American treasure performance is negotiated at low levels on Tuesday while market participants expect the last monetary policy meeting of the Federal Reserve of May 7. In addition, investors are also attentive to the demand for the auction of notes at 10 years at 13:00 et.
10 -year yield is maintained at 4,345% before the auction of 39,000 million; The DXY falls, promoting gold above $ 3,400 while the markets wait for Powell’s tone
The US Treasury will sell $ 39,000 million in 10 years. On Thursday, the treasure will auction 22,000 million dollars in 30 years.
The 10 -year American treasure bonus yield is maintained by 4,345% after increasing more than fifteen basic points (BPS) during the last three negotiation sessions, raising the coupon from around 4.19%. However, he failed to underpin the dollar, which remains under pressure, as reflected in the US dollar index (DXY).
The DXY, which follows the performance of the dollar against a basket of six currencies, fell 0.31% to 99.47.
The low US yields and a weaker US dollar have promoted gold prices. The yellow metal is about to overcome the 3,400 $ brand again when registering profits of more than 1.85%.
In the data front, the US trade balance revealed that the deficit was extended in March, dragging the figures of the Gross Domestic Product (GDP) to negative territory for the first quarter of 2025.
Meanwhile, market actors are waiting for the Federal Open Market Committee meeting (FOMC) on Wednesday. Policy responsible are expected to maintain rates without changes due to fears that tariffs are prone to inflation.
After the meeting, the operators will observe the press conference of the president of the FED, Jerome Powell, who could prepare the land for the next movement of the Fed.
Swaps markets show operators predicting that Fed’s first rate cut in 2025 will be in July. There are also two other cuts of 25 basic points (BPS) towards the end of the year.
Fed Faqs
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
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.
