The market reacted to macroeconomic data that indicated the slowdown in price and labor pressures.
The performance of the US treasury bonds —treasuries— to 10 years registered its biggest weekly drop of the year after the latest data from the country pointed to a cooling of the economy and, therefore, to a possible relaxation of the contractionary monetary policy.
He work Department reported that the prices of imports Americans fell 0.4% last month, below the estimate of a 0.1% rise and after an unrevised increase of 0.9% in April, due to the decline in the prices of energy products, another positive sign for the prospects of inflation.
The report came after economic data this week indicated that the working market and price pressures are showing signs of cooling.
Consequently, the 10-year bond yield It lost 2.3 basis points, to 4.217%, accumulating a decline of almost 22 basis points in the week, on track for its biggest weekly drop since mid-December. The return of the notes for 30 yearsfor its part, subtracted 5 basis points, to 4.351%.
Likewise, a highly guarded part of the performance curvewhich measures the differential between the return of two- and ten-year papers and is considered an indicator of economic expectations, operated at -47.7 basis points.
Meanwhile, the two-year debt yield, which usually moves at the rate of rate expectationsrose 0.4 basis points, to 4.692%.
“Now the trend towards inflation moderationbut it is clear that, after the disappointments of the first quarter, the Federal Reserve “doesn’t want to give the impression that the battle is won and that we can now proceed to cut rates without further confirmation that this recent improvement in inflation trends is here to stay,” he told Reuters. Andrzej Skiba, of RBC Global Asset Management in Stamford, Connecticut.
However, markets reacted with the expectation that the first cut would occur in September.
Source: Ambito
