{"id":11598,"date":"2023-12-20T20:47:45","date_gmt":"2023-12-20T20:47:45","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/treasury-yields-end-at-lowest-levels-in-five-months-or-more-as-u-k-inflation-decelerates\/"},"modified":"2023-12-20T20:47:45","modified_gmt":"2023-12-20T20:47:45","slug":"treasury-yields-end-at-lowest-levels-in-five-months-or-more-as-u-k-inflation-decelerates","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=11598","title":{"rendered":"Treasury yields end at lowest levels in five months or more as U.K. inflation decelerates"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002830968\" role=\"document\">\n<p>Government-bond yields in the U.S. and the U.K. finished lower on Wednesday after the latest inflation report from Britain fueled hopes for continued easing in price pressures and interest-rate cuts by central banks.<\/p>\n<h2>What happened<\/h2>\n<ul class=\"articleList\">\n<li>\n      The yield on the 2-year Treasury<br \/>\n        BX:TMUBMUSD02Y<br \/>\n       dropped 7 basis points to 4.367%, from 4.437% on Tuesday. Wednesday\u2019s level is the lowest since June 1, based on 3 p.m. figures from Dow Jones Market Data. <\/p>\n<\/li>\n<li>\n      The yield on the 10-year Treasury<br \/>\n        BX:TMUBMUSD10Y<br \/>\n       fell 4.5 basis points to 3.876%, from 3.921% Tuesday afternoon.<\/p>\n<\/li>\n<li>\n      The yield on the 30-year Treasury<br \/>\n        BX:TMUBMUSD30Y<br \/>\n       retreated 3.1 basis points to 4.004%, from 4.035% late Tuesday.<\/p>\n<\/li>\n<li>\n      Wednesday\u2019s levels are the lowest for the 10- and 30-year rates since July 26.<\/p>\n<\/li>\n<\/ul>\n<h2>What drove markets<\/h2>\n<p>Government-bond yields fell on Wednesday, after a report showed annual inflation in the U.K. eased to 3.9% in November, its slowest pace in more than two years. The rate had been expected to come in at 4.4%, according to a poll by The Wall Street Journal.<\/p>\n<div class=\"paywall\">\n<p>The U.K. data reinforced investors\u2019 hopes that price pressures continue to wane in developed economies and that central banks can swiftly cut borrowing costs next year, despite protestations to the contrary by several U.S. Federal Reserve officials.<\/p>\n<p>The 10-year U.S. Treasury yield slipped back below 3.9%, while the yield on equivalent-maturity British gilts<br \/>\n        BX:TMBMKGB-10Y<br \/>\n       tumbled 13.3 basis points to 3.525%, one of the lowest levels since April, as investors priced in a sooner-than-expected shift toward cutting rates by the Bank of England.<\/p>\n<p>German<br \/>\n        BX:TMBMKDE-10Y<br \/>\n       and Japanese<br \/>\n        BX:TMBMKJP-10Y<br \/>\n       10-year yields also fell sharply, the latter of which was helped by the Bank of Japan\u2019s decision earlier this week to maintain its ultraloose monetary stance. <\/p>\n<p>In U.S. data released on Wednesday, existing-home sales unexpectedly inched up by 0.8% in November to an annualized 3.82 million, and the consumer-confidence index jumped to 110 in December. Treasury\u2019s $13 billion auction of 20-year bonds came in soft, according to strategist Ben Jeffery of BMO Capital Markets.<\/p>\n<p>Traders priced in an 88.6% probability that the Fed will leave interest rates unchanged at between 5.25%-5.5% on Jan. 31, according to the CME FedWatch Tool. The chance of at least a 25-basis-point rate cut by March was seen at 80.5%, up from 27.5% a month ago.<\/p>\n<h2>What economists are saying<\/h2>\n<p>\u201cOur inflation forecasts point to a rise in inflation the next two months, so we think the market expectations for a rate cut in March are overdone,\u201d said chief U.S. economist Ellen Zentner and others at Morgan Stanley, in a note.<\/p>\n<p>\u201cWe think it will take until June for the Fed to have clear and convincing evidence inflation will return to the 2% target, and therefore begin cutting rates,\u201d they wrote. To get a rate cut in March, \u201cwe think we would need to see less than 50K for Feb nonfarm payrolls AND core CPI below 0.2% month on month.\u201d  <\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/ten-year-treasury-dips-below-3-9-as-u-k-inflation-falls-to-slowest-pace-in-two-years-9cfe817e?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Government-bond yields in the U.S. and the U.K. finished lower on Wednesday after the latest inflation report from Britain fueled hopes for continued easing in price pressures and interest-rate cuts by central banks. What happened The yield on the 2-year Treasury BX:TMUBMUSD02Y dropped 7 basis points to 4.367%, from 4.437% on Tuesday. Wednesday\u2019s level is the lowest since June 1, based on 3 p.m. figures from Dow Jones Market Data. The yield on the 10-year Treasury BX:TMUBMUSD10Y fell 4.5 basis points to 3.876%, from 3.921% Tuesday afternoon. The yield on the 30-year Treasury BX:TMUBMUSD30Y retreated 3.1 basis points to 4.004%,<\/p>\n","protected":false},"author":1,"featured_media":322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-11598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Treasury yields end at lowest levels in five months or more as U.K. inflation decelerates | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"Government-bond yields in the U.S. and the U.K. finished lower on Wednesday after the latest inflation report from Britain fueled hopes for continued\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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