Treasuries rally as traders price in US rate cuts

Thursday, 06. June 2019 09:31

Prices of the best-rated government debt securities mostly jumped on Thursday and pulled yields strongly lower in the runup to the monetary policy update from the European Central Bank. Recent weak macroeconomic data and trade tensions have underpinned volatility in the markets and increased concern about a looming recession in the United States and Germany. President Donald Trump today indicated the possibility of rolling out tariffs for more merchandise imported from China.

The first round of negotiations with Mexico about illegal immigration has failed and a 5% levy could be rolled out on June 10. Market bets showed the perceived probability of an interest rate cut by the Federal Reserve this month reached one third for the first time yesterday.

The US two-year note yield retreated by two basis points at 3:24 am ET to 1.835%. The ten-year rate dipped 2.2 points to 2.112%, staying near this week's 31-month low. The yield on the 30-year bonds fell three points to 2.618%. Corresponding futures grew 0.04% ,016% and 0.31%, respectively. Germany's benchmark 10-year Bund yield was little changed at a negative 0.227% after touching a record low at minus 0.23%. Futures advanced 0.06%.

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