BOND REPORT: Treasury Yields Edge Lower As Traders Await Weekend Vote On Brexit
18 Octubre 2019 - 03:02PM
Noticias Dow Jones
By Sunny Oh
Fed's Clarida says economy still facing risks, inflation
muted
U.S. Treasury yields were mostly lower on Friday as investors
eyed developments on Brexit ahead of Parliament's vote on the
weekend.
What are Treasurys doing?
The 10-year Treasury note yield fell a basis point to 1.747%,
but was virtually unchanged for the week. The 2-year note rate fell
3.1 basis points to 1.573%, contributing to a 3.6 basis point drop
this week. The 30-year bond yield was flat at 2.243%, but up 3.3%
for the week.
What's driving Treasurys?
Market participants said they were awaiting the U.K.'s
Parliament vote on U.K. Prime Minister Boris Johnson's proposal at
Saturday. Optimism initially surrounded Johnson's deal after
European Union officials backed the agreement, but a lack of
support from Northern Ireland's Democratic Unionist Party has
weighed on the likelihood of the bill's ratification.
See: What a Brexit deal would mean for U.S. stocks and global
investors
(http://www.marketwatch.com/story/what-a-brexit-deal-would-mean-for-us-stocks-and-global-investors-2019-10-17)
In economic news, China's National Bureau of Statistics said
growth of the world's second-largest economy slowed to 6% growth
(http://www.marketwatch.com/story/chinas-economic-growth-continues-to-cool-off-2019-10-17)
in the third quarter from a 6.2% pace in the second quarter, and
the slowest pace since the early 1990s, reflecting the impact of
the U.S. - China trade dispute and slowing world growth also.
Traders also monitored several speeches by senior Federal
Reserve officials. Fed Vice Chairman Richard Clarida said
(http://www.marketwatch.com/story/feds-clarida-says-economy-facing-risks-while-inflation-remains-muted-2019-10-18)the
economy was still facing risks, and that inflation was muted. But
he did not comment on the outlook for interest rates at the
upcoming Oct. 29-30 meeting.
In money markets, New York Fed President John Williams said late
Thursday
(http://www.marketwatch.com/story/feds-williams-says-central-bank-would-adjust-plan-to-soothe-funding-markets-as-appropriate-2019-10-17)that
the central bank was closely monitoring its measures to soothe
pressures in funding markets, and could adjust its plans. Since
funding markets seized up last month, the U.S. central bank has
regularly intervened to provide liquidity, offering daily
repurchasing agreements to lend out funds to market participants
thirsty for cash and announcing $60 billion of bill purchases at
least through the second half of 2020.
Federal Reserve officials are heading into their meeting in two
weeks likely to cut interest rates while debating whether they have
done enough for now to vaccinate the economy against growing risks
of a sharper slowdown, the Wall Street Journal reported
(https://www.wsj.com/articles/fed-eyes-another-rate-cut-weighs-when-to-stop-11571391003?mod=hp_lead_pos7).
What did market participants' say?
"Even if we do not know what the ramifications will be should
Brexit occur, the existence of a deal agreed upon by Europe and the
UK removes some of the questions from the past 2.5 years. Investors
will be watching Parliament for signs the current deal will pass,"
wrote Jody Lurie, an analyst at Janney Montgomery Scott.
(END) Dow Jones Newswires
October 18, 2019 15:47 ET (19:47 GMT)
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