This is the third day in a row that Wall Street has opened in the green, tonic that was also the majority during the past week, although the gains have been relatively moderate.
In recent weeks, investors have been optimistic about signs that inflation is moderating and, meanwhile, that the US central bank may consider stopping raising interest rates or at least reducing their pace.
The reference rate of the Federal Reserve (Fed) is currently in a range between 4.3% and 4.5%.
On the other hand, investors will take a close look at the monthly inflation figures to be released on Thursday and the fourth-quarter 2022 business results of major US companies.
Reports from the main banks are expected on Friday, such as Bank of America, JPMorgan Chase and Citigroup.
All sectors also started the day in green, with the greatest gains for non-essential goods (1.8%) and real estate (1.7%).
In other markets, Texas oil was up at this time at $76.82 a barrel, The yield on the 10-year US bond fell to 3.6%, gold rose to $1,877.10 an ounce and the dollar lost ground against the euro, with a change of 1.0772.
US Treasury bond yields
Long-term US Treasury yields fell on the daya day before the release of consumer prices, as the market anticipates that inflation is on a sustainable downward path and that the Fed will cut interest rates at the end of the year.
Economists polled by Reuters expect the CPI to slow to 6.5% in December, from 7.1% in November, an estimate that is fueling a rebound in risk appetite in equity and fixed income markets.
The yield on the 10-year Treasury fell 4.1 basis points to 3.6%, while yields on all longer-term bonds and debentures fell. Yields move inversely to price.
Yields on shorter-term debt, below two years, were slightly higher as futures assume the Federal Reserve will continue to raise rates and hit 5% in either February or late March, Steven said. Ricchiuto, chief US economist at Mizuho Securities USA LLC in New York.
Futures estimate that the Federal Reserve’s target rate will be 4.9% in June, but then it will fall to 4.5% in December, indicating that the Fed would cut rates.
The fixed income market is trying to understand how the economy will behave after a hard or soft landing, as the inverted yield curve continues to project a rather harsh recession, said Marvin Loh, a senior global macro strategist at State Street.
The difference between the yields on two-year and 10-year Treasuries, an indicator of recession when short-term yields are higher than those on longer-term securities – an inverted yield curve – stood at – 67.7 basis points.
The two-year yield, which typically reflects interest rate expectations, was down 0.5 basis points to 4.253%, while the 30-year bond yield was down 6.2 basis points to 3.692%.
Source: Ambito
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