US Government bond prices trading lower
Mihir Kapadia, CEO and Founder, Sun Global Investments
US government-bond prices traded lower Wednesday as safe-haven demand faded and strong economic data was released. The yield on the 10-year US Treasury is 2bp higher at 2.147 per cent. The dollar continued it three-day rally which has followed a near five-month decline which had seen the Dollar basket (DXY) fall to the lowest levels since January 2015.
The next key indicator for the trend for the US dollar will be Friday’s data where a strong jobs number will raise the expectations of an interest rate increase before the end of 2017.
Currently the interest rate futures markets are pricing in a 33 per cent increase in interest rates before the end of the year. The most notable feature in the FX market continues to be the strength of the Euro which is currently at 1.19 against the USD and has appreciated by 13 per cent against the US dollar since March.