Unexpected high inflation drives down Treasury bonds
June 18, 2014 5:34 amVideo
Latest News
- Analysis of EUR/USD pair on May 23rd. Buyers make a second attempt to test the 1.0880 level May 23, 2024
- Analysis of GBP/USD pair on May 23rd. American reports saved the dollar May 23, 2024
- Forecast of EUR/USD pair on May 23, 2024 May 23, 2024
- Forecast of GBP/USD pair on May 23, 2024 May 23, 2024
- USD/JPY: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- GBP/USD: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- EUR/USD: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- GBP/USD: trading plan for the US session on May 23rd (analysis of morning deals). Buyers hit resistance at 1.2760 May 23, 2024
- EUR/USD: trading plan for the US session on May 23rd (analysis of morning deals). The euro rebounded from the 1.0819 level May 23, 2024
- Technical analysis – US 500 index slips after all-time high but holds within bullish area May 23, 2024
- Nvidia set to propel Wall Street to new highs but Fed uncertainty weighs – Stock Markets May 23, 2024
- Trading Signals for EUR/USD for May 23-25, 2024: buy above 1.0834 (200 EMA – rebound) May 23, 2024
- Trading Signals for SILVER (XAG/USD) for May 23-25, 2024: buy above 30.00 (200 EMA – rebound) May 23, 2024
- Forex forecast 05/23/2024: EUR/USD, GBP/USD, USDX, Oil and Bitcoin from Sebastian Seliga May 23, 2024
- Video market update for May 23, 2024 May 23, 2024
- USD/JPY: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- GBP/USD: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- EUR/USD: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- Technical Analysis – EURUSD recovers ground, remaining above downtrend line May 23, 2024
- Technical Analysis – EURGBP tests critical pivot area after slump May 23, 2024
Government bonds from the US have started to be let go by investors who are using the example of prices of consumer products rising higher than what was originally expected as an indicator of future market conditions.
Latest figures showed that May’s consumer prices underwent an increase of 0.4% to the surprise of the market leading to the annual inflation rate to similarly climb from April’s 2% to 2.1% in May. Meanwhile, the US economy’s core consumer price index, a tool used to measure changes in a country’s cost of living except for energy and volatile food products, was up 0.3%
As a result, the ensuing selling spree of US Treasury paper born from inflation news have helped 10 year bond yields climb six basis points to 2.66%. This increase has contributed to the US dollar’s overall gain in the currency market against several of its counterparts by 0.2%.
The lofty inflation levels are expected to play a major role in discussions between committee members of the Federal Reserve. The central bank is meeting this week to determine the appropriate timing for hiking up interest rates, a move that has been surrounded by much speculation in the market. Pressure from the recent consumer price figures could serve as a push for the Fed to enact the hikes sooner that the initially planned mid-2015 schedule.
Another factor that may play a role in making early rate hikes possible are global issues such as the Islamist insurgency in Iraq and what impact it may have on crude oil supplies in the world. Should oil prices continue to increase and compound the inflation in consumer products, some economists warn that this may add even more pressure to the Fed.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: