US10Y Is Back Above 4% for the First Time in Over 2-months, so What's Next?
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.
U.S. Hiring Might Be Cooler Than It Seems
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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After the unexpectedly strong non-farm data, bond traders are preparing to deal with the scenario of the US economy not landing.
The unexpectedly strong September non-farm employment report in the USA has led to a sharp rise in US bond yields, making the 'no landing' scenario once again a hot topic in the bond market. The 'no landing' scenario is constraining the Fed's room for interest rate cuts, further dampening the buying frenzy for US bonds.
Stocks Slip As Oil Prices Surge, 10-Year Yields Cross 4%; Energy Sector Outperforms: What's Driving Markets Monday?
Market Declines Monday Afternoon
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Treasury Yields Rise As Fed Repricing Goes On -- Market Talk
Amid unexpectedly strong non-farm data, the benchmark US bond yield touched 4% for the first time since August.
Usa Treasury bonds continued last week's decline, falling on Monday, with the yield on 10-year US bonds rising by 4 basis points to 4.01% and the yield on 2-year US bonds rising by 8 basis points to 4%.
What to Expect in the Week Ahead (CPI Index and Fed Officials' Speaks; Earnings From PepsiCo and JPMorgan)
Weekly Buzz: Market volatility for very good reasons
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