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Summary
The full text of James Carville’s infamous remark-- “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”—gets to the essential point. In a capitalist economy, the basic ingredient is money and the cost of funds. The bond market’s tempered view is likely to tell you more about economic probabilities than any other trading market. Equities have retained most of their post-election gains, the dollar and commodities have lost most of their Trump surge. The yield on the 10-year U.S. Treasury closed at 2.23 percent on Friday, much closer to the 2.61 percent post-election high that the 1.78 percent close on the Friday before the vote. Is this a judgment on U.S. economic prospects over the next two years? Or is it simply an acknowledgment that the Fed is embarked on a rate cycle and the 10-year yield is still less than half its 20-year average. What are the U.S. and global bond markets telling us about the health and future of the world’s economy?
Join us for the view from the world’s most powerful market.
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
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Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.