BBH: U.S. Treasury Yields Key Driver For Markets
U.S. Treasury yields have become the key driver for global markets, saysBrown Brothers Harriman. Yields have been rising lately, which has underpinnedthe U.S. dollar but hurt equities. “After spiking to 3.23% yesterday, the U.S.10-year yield fell back but remains elevated just above 3.20%,” BBH says. “Sotoo is the two-year yield, now trading at 2.88%. Bloomberg WIRP suggestsa 76% chance of a December hike, which is at the highs. More importantly,markets are just starting to price in a potential third hike next year on theback of strong U.S. data and hawkish Fed comments.” The reaction to Federal Reserve ChairJerome Powell’s comments this week shows that “it’s clear that Fed officials still have the power to move markets”between meetings of the Federal Open Market Committee, BBH adds. Further, “recent Fed commentssupport our view that the markets are seriously underestimating the Fed’sintentions with regards to higher rates.”
By Allen Sykoraof Kitco News; asykora@kitco.com
FXTM:Gold May Face 'Another Rough And Rocky Trading Quarter'
Friday October 5, 2018 07:48
Gold could be in foranother “rock and rocky” quarter as its fortunes remain tied to the U.S.dollar, says LukmanOtunuga, research analyst at FXTM. The metal was nearly directionless early Friday as investors remained cautiousahead of the highly anticipated U.S. report on nonfarm payrolls. The dataalways has a big impact on U.S. interest-rate expectations, thus the dollar andgold. “Withgold’s fortune tied to the dollar’s performance, this could be another roughand rocky trading quarter for the precious metal,” Otunuga says. “Taking a lookat the technical perspective, prices are likely to trade within a modest rangeuntil the NFP figures are released....A solid breakdown below the $1,190 supportlevel could inspire a move towards $1,181 and $1,173, respectively.”
By Allen SykoraFor Kitco News
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