—U.S. Treasury securities exhibited initial indecisiveness on Tuesday but eventually ascended into positive territory as the trading day progressed.Bond prices gained momentum in the morning and retained strong positive performance into the afternoon trading session. Consequently, the benchmark ten-year note yield, which inversely correlates with its price, decreased by 5.1 basis points to 3.646 percent.This upward movement marks the sixth consecutive session in which the ten-year yield has declined, culminating at its lowest closing level in over a year.The persistent strength in Treasury bonds was largely attributed to optimism regarding future interest rates ahead of the anticipated release of significant inflation data.The Labor Department is set to publish reports detailing consumer and producer price inflation for August on Wednesday and Thursday, respectively.These reports are expected to indicate a slowdown in the growth rates of both consumer and producer prices when compared year-over-year.The inflation data is likely to influence forecasts concerning interest rates in advance of the Federal Reserve’s upcoming monetary policy meeting next week.While it is broadly anticipated that the Fed will initiate a reduction in interest rates, discussions remain about the magnitude of the rate decrease.According to CME Group’s FedWatch Tool, there is currently a 67 percent probability that the Fed will lower rates by 25 basis points and a 33 percent chance of a 50 basis point reduction.Wednesday’s trading activity is anticipated to be heavily influenced by responses to the consumer price inflation report and its implications for the future trajectory of interest rates.—The material has been provided by InstaForex Company – www.instaforex.com
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