Treasuries Approached Record Lows | IFCM Hong Kong
IFC Markets Online CFD Broker

Treasuries Approached Record Lows - 11.8.2011

The S&P 500 index dropped by 4.4% yesterday after jumping by 4.7% on Tuesday. Stock prices dived on Wednesday in Europe and the United States, led downward by some of the world’s biggest banks. Asian stocks showed today mostly negative dynamics as well, as investors are shifting money into the safety of US Treasury bonds despite yields that are near their lowest levels in history. Amid the turmoil on Wednesday, gold prices surged to another record, above 1800 dollars per ounce. US Dollar The dollar fell against a majority of its major peers in Asian trading hours today, except the Japanese yen, reversing yesterday’s broad gains. The dollar index advanced yesterday from 73.8 to 74.9, as investors are still showing an increased demand for government bonds, pushing their yields lower and lower. Yields for 10-year government bonds fell yesterday to 2.1%, the lowest since December 2008. Demand for Treasuries is running at a pace matching the record set last year when the government sold 2.249 trillion dollars of notes and bonds, the most ever, Bloomberg said. As for important economic data, investors will be closely watching today initial jobless claims report in the US. According to preliminary estimations, the number of claims for jobless benefits rose by 5000 last week, to 405000, from 400000 a week earlier. Euro The euro rose in Asian trading hours, covering partly yesterday’s losses against the dollar amid rising French debt yields, despite the country carries top “AAA” grades from the major rating companies. Earlier this week the European Central Bank managed to push lower both Italian and Spanish bonds as it is “actively implementing” the bond purchase program. Spanish 10-year yields fell below 5% for the first time since December, compared with more than 6% last week. The euro fell under pressure yesterday also after an unexpectedly week economic data from France. Industrial production fell by 1.6% in June after a 1.9% rise in May. Annual figures also disappointed: annual growth pace declined to 2.3% in comparison with a projected growth of 3.9%. Australian Dollar Australian dollar remains under pressure against the greenback after touching this week an almost 5-month low – 0.9927. The Aussie also weakened after the nation’s statistics bureau said the unemployment rate jumped to 5.1% in July from 4.9% a month earlier, the first increase since October. The number of people employed unexpectedly fell by 100 after a revised 18200 growth in June. The report also revealed a 22200 decline in the number of full-time jobs, while the part-time employment rose by 22100. Unfavorable employment data confirms the central bank’s concerns, as it reported last week in its quarterly monetary policy statement that “the increase in resources exports will boost GDP outcomes over coming quarters, although the rebound is likely to be more protracted than previously expected.” Investors are also increasing their bets, that the Reserve Bank may cut interest rates by 25 basic points in the coming months.
IFCM Trading Academy - New era in Forex education
Pass Your Course:
  • Get Certificate
trading academy

See Also

image
Follow the Market with Our Live Tools and Calendars
Close support
Call to Skype Call to WhatsApp Call to telegram Call Back Call to messenger