The 10-year US Treasury yield has steadily fallen over the past 24 hours and is trading close to its low of 1.69%, down 6 bps for the day.
The lowest close this year was 1.66% in mid-February so that might represent an area of support.
The overnight move obviously reflects a safe-haven bid but could also suggest more confidence that the Fed will be reluctant to raise rates further in the current global environment. We’ll be watching NY Fed President Dudley’s speech tonight for further guidance. He is one of the few Fed speakers we bother listening to.
Germany’s 10-year rate fell by 3 bps to 0.09%, within a few basis points of breaking the record low set a year ago.
In local trading, rates have barely moved over recent days and yesterday was no exception, with swap rates within 1-1.5% of the previous day’s close and little movement across the government curve.
The nugget from RBNZ Deputy Governor Bascand’s speech on the labour market was that the unemployment rate was seen as a less useful measure than previously thought regarding labour market slack and wage pressures.
The RBNZ introduced a new “labour market conditions index” (LUCI) that incorporated the principal component of 17 different labour market measures. No doubt this will see analysts trying to replicate the index, as the RBNZ will be watching this closely for its policy deliberations.
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Jason Wong is on the BNZ Research team. All its research is available here.
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We’ll be watching NY Fed President Dudley’s speech tonight for further guidance. He is one of the few Fed speakers we bother listening to.
Yes indeed.
It’s never a good sign when bank stocks are leading any retreat, but that is especially the case given recent events when several high profile banks were at the epicenter of early 2016’s liquidation rerun. As usual, Deutsche Bank and Credit Suisse are the firms most mentioned and among those most disfavored at these times. The media struggles to find reasoning since the recovery is assured with all the “stimulus” especially in Europe. Instead, the Chairmen of both banks have had to issue denials that they are privately being asked not to run for their respective board seats again even though both men replaced their top executives just last year – representing a drastic shift in strategy no less. Read more
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