Just two days! The expectation of a 50 basis point rate cut was shattered as the 10-year US Treasury yield returned above 4%.
1. On Monday this week, the sharp drop in the US Treasury market further intensified, and the yield on the benchmark 10-year US Treasury bond returned above the 4% level, reaching its highest level since August; 2. Due to the unexpectedly strong US employment report announced last Friday, traders are forced to reevaluate their predictions for the outlook of the US Federal Reserve's monetary policy.
"Hot non-farm payroll data suppresses the market's expectation of a rate cut by the Federal Reserve, and the 'global assets pricing anchor' returns to 4%."
The probability of the Fed cutting interest rates by 50 basis points has plummeted, leading to intensified selling of U.S. Treasury bonds, pushing the 10-year U.S. Treasury yield to break through the important 4% level; the market bets that the interest rate cut before the end of the year will be less than 50 basis points.
US stocks collectively fell by about 1%, with Chinese concept stocks rebounding in a V-shape, US bond yields rising above 4%, and oil prices rising by nearly 4%.
USA stocks and bonds both fell, with the Dow down 400 points, Tesla down 3.7%, Nvidia up over 2%, Chinese concept stocks fell nearly 3% before closing higher, Alibaba and Tencent ADRs rose 2.6%, Li Auto Inc. rose over 4%. The two-year US treasury yield rose nearly 10 basis points, breaking above 4% for the first time since August for both the 2-year and 10-year treasury yields, with the US dollar hovering at a seven-week high since August 16. Brent crude oil closed above $80, reaching a six-week high along with WTI oil climbing above $77. Silver briefly fell more than 2.4%.
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nasiGoreng6887 : Maybe 2025, no more recession in near term