Lower U.S. Borrowing Helps Treasurys, but Bunds Still Outpeform
Expectations of a Fed interest rate cut are getting stronger! US bonds continue to strengthen and are set to experience the longest consecutive monthly increase in three years.
US bond indicators will rise for the third consecutive month in July, the longest consecutive rise since 2021. Market pricing shows that investors are ready for a Fed rate cut in September, and the question now is whether there will be more cuts. Blackrock predicts that there may be three rate cuts this year.
As the interest rate cut approaches, the US has a reserve of 6 trillion dollars in ammunition, but the biggest beneficiary may not be the US stock market.
The loose interest rate cycle in the United States is about to begin, and some investors believe that it will cause funds to flow from money market funds (MMFs) to US stocks, providing support for stock market growth. However, UBS Group pointed out that historical data shows that this may not be the case.
The longest consecutive increase in three years! The expectation of an interest rate cut by the Federal Reserve ignited the US bond market, and investors are facing a crucial decision week!
The continuous rise in US bond prices suggests the possibility of achieving a third consecutive month of growth, which will be the longest lasting uptrend in three years.
Will the European Central Bank cut interest rates as expected in September? Two major data releases this week will provide the first clues.
A series of economic data to be released this week in the eurozone will provide key information for the European Central Bank to determine whether to resume rate cuts in September.
U.S. Rate-Cut Expectations Could Reinforce Yield Curve Steepening
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