The Bank of Japan's recent shift to negative
rates has fuelled concerns that ever-more exotic monetary policy is
rapidly reaching the point of diminishing returns.
Yet
murmurings about the risk of recession in the United Sates has also led
investors to wager the Federal Reserve will have to slow, or suspend
altogether, plans to normalise rates.
Futures markets have priced out any chance of a hike in March and imply a funds rate of just 0.43 percent by December <0#FF:>. The current effective funds rate is 0.38 percent.
That has pulled down 10-year Treasury yields to their lowest since early 2015 at 1.69 percent US10YT=RR and undermined bullish bets on the U.S. dollar.
It touched a six-week trough on the Swiss franc CHF=, while the euro edged up to $1.1217 EUR=. Against a basket of currencies, the dollar eased 0.1 percent to 96.485 .DXY.
The dollar dived as far as to 114.205 yen JPY=, having been above 121 just a week ago, while the euro fell as much as one percent to 128.31 yen EURJPY=.
The yield on Japan's benchmark 10-year government bond JP10YTN=JBTC turned negative for the first time as the Nikkei stock index tumbled.
The 10-year JGB yield touched minus 0.010 percent. It was the first time a G7 nation's 10-year government bond yield has turned negative, although yields on German bunds have come relatively close.
With more and more sovereign bonds paying negative rates, the relative cost of holding gold has seemed less and less of a burden. The metal XAU= reached its strongest since June at $1,200.60 an ounce, and last traded at $1,193.60.
Oil prices bounced slightly after three sessions of losses. Brent futures LCOc1 added 11 cents to $32.99 a barrel, while U.S. crude CLc1 rose 34 cents at $30.03.
Futures markets have priced out any chance of a hike in March and imply a funds rate of just 0.43 percent by December <0#FF:>. The current effective funds rate is 0.38 percent.
That has pulled down 10-year Treasury yields to their lowest since early 2015 at 1.69 percent US10YT=RR and undermined bullish bets on the U.S. dollar.
It touched a six-week trough on the Swiss franc CHF=, while the euro edged up to $1.1217 EUR=. Against a basket of currencies, the dollar eased 0.1 percent to 96.485 .DXY.
The dollar dived as far as to 114.205 yen JPY=, having been above 121 just a week ago, while the euro fell as much as one percent to 128.31 yen EURJPY=.
The yield on Japan's benchmark 10-year government bond JP10YTN=JBTC turned negative for the first time as the Nikkei stock index tumbled.
The 10-year JGB yield touched minus 0.010 percent. It was the first time a G7 nation's 10-year government bond yield has turned negative, although yields on German bunds have come relatively close.
With more and more sovereign bonds paying negative rates, the relative cost of holding gold has seemed less and less of a burden. The metal XAU= reached its strongest since June at $1,200.60 an ounce, and last traded at $1,193.60.
Oil prices bounced slightly after three sessions of losses. Brent futures LCOc1 added 11 cents to $32.99 a barrel, while U.S. crude CLc1 rose 34 cents at $30.03.
No comments:
Post a Comment