(New York = Yonhap Infomax) Reporter Jinho Jeong = US Treasury bond prices are rising. Investor sentiment is interpreted to have improved as the US personal consumption expenditure (PCE) price index for March came out in line with market expectations.
Intraday trend of US 10-year Treasury bond interest rates[출처 : 연합인포맥스]
According to the Yonhap Infomax foreign interest rate intraday screen (screen no. 6532), as of 9 am on the 26th (US Eastern time), the 10-year Treasury bond interest rate in the New York bond market was 4.674%, down 3.60bp from 3 pm on the previous trading day.
The 2-year interest rate, which is sensitive to monetary policy, fell by 1.10bp to 4.993% during the same period.
The 30-year government bond interest rate traded at 4.785%, down 3.50bp from the previous day.
The inversion between 10-year and 2-year bonds widened from -29.4bp on the previous trading day to -31.9bp.
Interest rates and government bond prices are moving in the opposite direction.
The March core PCE price index published on this day was in line with market expectations compared to the previous month and slightly above expectations compared to the same period last year. The core PCE price index is the Federal Reserve’s (Fed) preferred price indicator.
The US Department of Commerce announced that the core PCE price index in March rose 0.3% compared to the previous month. This figure is in line with the market forecast of an increase of 0.3% compiled by the Wall Street Journal (WSJ).
The PCE core price index in March rose 2.8% compared to the same period last year, beating market expectations of a 2.7% increase by 0.1 percentage point.
The PCE core price index rose 0.5% month-on-month in January, again fueling inflation concerns, but monthly gains were limited to 0.3% in February and March, showing signs of slowing somewhat degrees.
The March PCE price index, which includes energy and food prices, also rose 0.3% from the previous month, meeting market expectations.
Bond investors are responding to these results with a buying edge. Since the March PCE price index was largely in line with market expectations and government bond prices have fallen sharply recently, it seems to be seen as an opportunity to buy at low prices.
However, there was little change in market expectations regarding the timing of the base interest rate cut. This means that the level of inflation is not high enough for the Federal Reserve to bring forward the interest rate cut.
According to a watchdog fed with the Chicago Mercantile Exchange (CME), after the PCE price index was published in March, the possibility of a base rate cut in June was reflected at only 11.5%. There is very little change compared to the previous day’s closing price of 9.7%.
“There is nothing the Fed can do now,” said Neil Dutta, head of economic analysis at Renaissance Macro Research “The Fed has no choice but to watch for strong inflation and employment growth.”
jhjin@yna.co.kr
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This article was published at 22:56 on the Infomax financial information terminal.
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