(Bloomberg) – Treasuries rose on Friday and were on pace to achieve a small weekly profit after survey data showed signs of American economic cooling.
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The yields were lower with at least two basic points, with short durations with nearly four basic points. Session Lows were reached after an unexpected fall in S&P Global’s Gauge of Services Activity and a downward revision of the sentiment meter of the University of Michigan, both before January. The rally left the treasury a little lower in the week, which started with the inauguration of Donald Trump to a second non-next presidential term.
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The data reinforces the view that the Federal Reserve DIE complies with 28-29 January-the-interest rates will already be reduced this year in June, after reductions at each of the last three meetings. Bonds also benefited from the lack of immediate action by Trump to impose rates on imports, although he said he is planning.
“With a data -dependent FED, the market is hypergericht on every economic release,” said Christian Hoffmann, portfolio manager at Thornburg Investment Management. At the same time, politics remains an important engine for volatility and uncertainty. “
Money markets and economists investigated by Bloomberg are unanimous in expecting FED chairman Jerome Powell and his colleagues will maintain their target range of 4.25% -4.5% for the American at night interest next week. Looking further, tariff waps now prefer two quarter -point reductions by the end of the year. A week ago only one was expected.
Bonds started selling in September and pushed 10-year revenues to a 14-month high of 4.8% earlier this month, which was a reflection of concern that trade protection could lead to inflation. Belijk inflation data for December released on January 15 and the comments of the Governor Christopher Waller the next day that a rate reduction remains possible halfway through the year, the bleeding stopped.
Short -term revenues, more sensitive than in the longer term to assess changes through the FED, have moved the most this week. The return of 10 years is 36 basic points higher than the two years, versus 34 basic points a week ago. Open-interest data for Treasury Futures suggest that investors expect the curve to be further reduced.