31 Jul 2013
Fixed income markets are on tendor hooks
FXstreet.com (Barcelona) - Fixed income markets are on tendor hooks ahead of the FOMC and other central banks meeting this week.
Treasuries are currently subject to speculation to the Fed trimming its bond buying programme this year. They are poised for a third monthly decline before the Fed decision this evening.
The U.S. are scheduled to announce the size of 10 and 30 yr debt auctions due for next week and could start to cut sales by $40b-$100b during the next year and many anticipate reductions as soon as next month. This has spurred a widening of the 2-10yr yields and the market and prices will now be data sensitive this afternoon.
US ADP employment change will be released and we then have US Q2 GDP in focus. What will be interesting is the markets reaction to the new GDP monitoring system that makes up the data. The US Government has invented a new way of calculating the data that now includes R&D spending, art, music, film royalties, books and theatre, and some will argue it is not comparable with the rest of the global nations. Eye sill be keen to these data and the spreads are already as wide as 231 basis points as demand is decreasing from investors who are looking for longer tem maturities.
The U.S. 10 year yield fell 0.01 pct to 2.60 at 6.30 am EST and the 1.75pct note with May maturity rose $1.25 to 92 23/32.
Treasuries are currently subject to speculation to the Fed trimming its bond buying programme this year. They are poised for a third monthly decline before the Fed decision this evening.
The U.S. are scheduled to announce the size of 10 and 30 yr debt auctions due for next week and could start to cut sales by $40b-$100b during the next year and many anticipate reductions as soon as next month. This has spurred a widening of the 2-10yr yields and the market and prices will now be data sensitive this afternoon.
US ADP employment change will be released and we then have US Q2 GDP in focus. What will be interesting is the markets reaction to the new GDP monitoring system that makes up the data. The US Government has invented a new way of calculating the data that now includes R&D spending, art, music, film royalties, books and theatre, and some will argue it is not comparable with the rest of the global nations. Eye sill be keen to these data and the spreads are already as wide as 231 basis points as demand is decreasing from investors who are looking for longer tem maturities.
The U.S. 10 year yield fell 0.01 pct to 2.60 at 6.30 am EST and the 1.75pct note with May maturity rose $1.25 to 92 23/32.