This will at least be one spot to feed into a calmer mood in broader markets for now. Long-end Treasuries are seeing some bids again, with yields backing away from the highs seen last week. 30-year yields are now down to 4.77%, falling a little further away from the 5% mark. Meanwhile, 10-year yields are seen at 4.34% today – down from a high of 4.59% on Friday last week.
As things stand, there’s still a lot to digest with Trump’s tariffs policy.
While we’ve gone through the initial reaction, it’s now over to analysing the impact of it all. At the same time, market players will also have to deal with the constant changes in the level of tariffs while also accounting for any possible retaliation and escalation.
Taking that into consideration, it’s hard to be too confident of a return to normality any time soon. That especially when US and China are still not seen making too much progress in striking an accord.
Xi is busy with his Southeast Asia tour this week and Trump is also not wanting to make the first move yet. So, there will definitely be economic pain to deal with during the interim.
As for Treasuries, it’s not just the relative uncertainty of the tariffs policy. The impact on the US deficit, inflation, economy, and Fed reaction function all also needs to be factored into the equation. And that’s the tough part at the moment, with investors already struggling for confidence amid the policy incoherence to begin with.
This article was written by Justin Low at www.forexlive.com.This will at least be one spot to feed into a calmer mood in broader markets for now. Long-end Treasuries are seeing some bids again, with yields backing away from the highs seen last week. 30-year yields are now down to 4.77%, falling a little further away from the 5% mark. Meanwhile, 10-year yields are seen at 4.34% today – down from a high of 4.59% on Friday last week.As things stand, there’s still a lot to digest with Trump’s tariffs policy.While we’ve gone through the initial reaction, it’s now over to analysing the impact of it all. At the same time, market players will also have to deal with the constant changes in the level of tariffs while also accounting for any possible retaliation and escalation.Taking that into consideration, it’s hard to be too confident of a return to normality any time soon. That especially when US and China are still not seen making too much progress in striking an accord.Xi is busy with his Southeast Asia tour this week and Trump is also not wanting to make the first move yet. So, there will definitely be economic pain to deal with during the interim.As for Treasuries, it’s not just the relative uncertainty of the tariffs policy. The impact on the US deficit, inflation, economy, and Fed reaction function all also needs to be factored into the equation. And that’s the tough part at the moment, with investors already struggling for confidence amid the policy incoherence to begin with.
This article was written by Justin Low at www.forexlive.com. Read MoreNews
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