Government bond yields rise as investors look to rate rises

Sovereign debt renewal

After more Federal Reserve Boards forecast a rise in 2022 and the UK central bank said the case was “strengthened” in the next few years due to “moderate tightening of monetary policy.” The year the Fed prices fell on Thursday as traders responded to the outlook for rising interest rates.

At the beginning of Thursday, the Norges Bank of Norway became the first major Western Central Bank. Interest rate hike after a pandemic..

In the United States, yields on 10-year government bonds, which are inversely proportional to prices, rose 0.1 points to 1.40%, the highest yield since mid-July. The Treasury yield for 30 years rose 0.11pp to 1.92%.

As traders anticipate higher interest rates or inflation, government bond prices tend to fall, which undermines the real return on fixed-rate securities.

Wednesday Fed Increase in the number of staff We expect US interest rates to rise next year. Nine officials of the Federal Open Market Committee predict that it will increase in 2022, according to the forecast. The Federal Reserve Board also suggested that it was ready to begin curtailing its pandemic-era bond purchase program in November.

In the UK, 10-year gilt yields rose 0.11pp to 0.91%.Bank of England raises interest rates in the UK The lowest ever It was 0.1% on Thursday, but warned that if gas prices continue to rise across Europe, consumer price inflation is expected to “just exceed 4%” in the fourth quarter of this year.Investors I’m looking forward to it now UK interest rates will rise by February.

“We have quite a lot of news streams [from central banks] Caroline Simmons, UK Chief Investment Officer, UBS Wealth Management, said:

Ewout van Schaick, Head of Multi-Asset Investment at NN Investment Partners, has been watching the development of the U.S. employment market after the pandemic and expects a “very gradual move” towards a rate hike by the U.S. central bank. Said.

Scott Rusterholtz, Inflation Investment Portfolio Manager, said:

In the stock market, the STOXX 600 index across Europe rose 0.9% on Thursday. Wall Street’s Best S & P 500 Index rose 1.5% in mid-afternoon in New York, alleviating imminent concerns. Potential default Real estate developer Evergrande has ignited China’s organizational crisis.

Evergrande, the world’s most debt-ridden real estate developer whose business has been hit by the Chinese government curb Loans to the real estate sector will be paid in dollar-denominated bonds on Thursday. The price of the bond indicates that the investor expects it to default.

Concerns about transmission from the Evergrande Group shook the global stock market on Monday. But on Wednesday, stressed developers said they had “resolved” onshore bond payments.

Robert Carnell, Head of Asia Pacific Area Studies at ING, said:

In the currency market, Sterling rose 0.8% against the dollar to $ 1.373 and the euro rose 0.5% to $ 1.175. The dollar index, which weights the greenback against a basket of six rival currencies, fell 0.5 points.

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Government bond yields rise as investors look to rate rises Source link Government bond yields rise as investors look to rate rises

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