The bond coup
Yesterday was marked by a coup from the US Treasury, which suddenly announced that it will ‘at least double’ the maximum size of its buyback operations for longer-term debt, hoping to ease pressure on long-term yields and borrowing costs. Phoah!
The markets reacted heavily to the news. The US 10-year yield fell sharply, while the 30-year yield dropped from its highest levels since 2007.
The latter helped support equity valuations: the S&P 500 eked out a small 0.21% gain but remained short of reversing the chip rout. VanEck’s semiconductor ETF lost 1.55% regardless. The US dollar tanked, letting the majors rally aggressively against the greenback.
This morning, we see US bonds and FX consolidate, as investors question what the Treasury announcement really means and what its longer-term impact could be.
Read the full article here.
Author
Ipek Ozkardeskaya
ipekScope
Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.
