The jump came after a government report showed the number of Americans filing new claims for jobless benefits fell further last week, in line with strong demand for workers and tight labor market conditions. The report also said layoffs fell in August, despite the Fed’s sharp interest rate hikes to quell inflation, which have raised the risk of a recession.
Fed expectations pushed Treasury yields to new highs. The return on two-year notes soared to 3.51% overnight, hitting its highest level since late 2007, while that on benchmark 10-year paper advanced another 6 basis points to 3.20. %.
The euro falls 0.37% although it remains above parity with the dollar, at 1.10016 dollars, while the pound reaches a new minimum in two and a half years with a drop of 0.5% to 1, $15,545.
The Japanese yen fell to 139.69 per dollar earlier in the day, its lowest level since 1998, before paring losses. The dollar was up 0.24% at 139.3 yen.
“Even after hitting new records, the dollar’s strength has room to extend a bit further, buoyed by the global slowdown and the European energy crisis in particular,” analysts at Generali Insurance Asset Management said.
The yield on benchmark 10-year US Treasuries hit a two-month high on Tuesday at 3.219%. Japan’s yield curve control policy means the return on its 10-year bond is just 0.24%.
Bitcoin trades in line with risk sentiment, dipping slightly and trading a fraction above $20,000. This cryptocurrency also saw the effect of fears over interest rates in the month and lost 13% of its value in August.
Source: Ambito
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