US yields rise as stocks rally, Trump considers Iran response
Improving risk appetite reduces demand for Treasuries
Trump to decide on Iran response in next two weeks
Fed's Waller says bank should consider cutting rates
June 20 - Longer-dated U.S. Treasury yields rose on Friday as stock markets rallied, reducing safe-haven demand for the bonds, and after Federal Reserve Chair Jerome Powell on Wednesday said policymakers expect inflation to rise over the summer. Stocks climbed after the White House said on Thursday that President Donald Trump would decide on potential U.S. involvement in the Israel-Iran conflict in the next two weeks, citing possible negotiations involving Iran soon. Iran said on Friday it would not discuss the future of its nuclear program while under attack by Israel, as Europe tried to coax Tehran back into negotiations.
'There's a bit of a risk-on trade going on, meaning people aren't really piling into Treasuries,' said Tom di Galoma, managing director at Mischler Financial Group.
U.S. government debt is catching up to yield increases on Thursday in European bonds, di Galoma said. U.S. markets were closed on Thursday for the federal Juneteenth holiday.
The yield on benchmark U.S. 10-year notes was last up 1.6 basis points at 4.411%. The interest-rate-sensitive 2-year note yield fell 0.2 basis points to 3.939%.
The yield curve between 2-year and 10-year notes steepened by around 2 basis points to 48 basis points.
Yields edged higher after comments from Fed's Powell at the conclusion of the U.S. central bank's two-day meeting on Wednesday were interpreted as slightly hawkish. The Fed held interest rates steady and policymakers signaled borrowing costs are still likely to fall in 2025. But Powell cautioned against putting too much weight on that view, and said he expects "meaningful" inflation ahead as consumers pay more for goods due to the Trump administration's planned import tariffs.
'Market reaction suggests a slightly hawkish read for the June FOMC,' Bank of America credit strategists Yuri Seliger and Sohyun Marie Lee said in a report, referring to the Federal Open Market Committee. 'However, the bigger picture is that the FOMC meetings had little market impact this year, and the June meeting was no exception.'
Fed funds futures traders are pricing in 49 basis points of cuts by December, indicating they continue to see two 25-basis-point rate reductions as most likely. Fed Governor Chris Waller said on Friday the U.S. central bank should consider cutting interest rates at its next meeting, given recent tame inflation data and the fact that any price shock from import tariffs will be short-lived.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
an hour ago
- Mint
Wall Street choppy, oil dips as US holds back from Mideast military action
NEW YORK (Reuters) -Major Wall Street indexes closed lower on Friday while oil prices fell after U.S. President Donald Trump held back from immediate military action in the Israel-Iran conflict. All eyes remained trained on the Middle East one week after an initial Israeli assault drew Iranian retaliation. The U.S. imposed Iran-related sanctions a day after Trump said he might take two weeks to decide on further action. According to preliminary data, the S&P 500 lost 0.21%, while the Nasdaq Composite shed 0.49%. The Dow Jones Industrial Average, however, rose 38.47 points, or 0.09%, to 42,210.13. Stocks had been broadly positive at the open, and dipped in and out of negative territory during the session. Global benchmark Brent crude futures fell 2.3% to settle at $77.01 a barrel, but gained 3.6% in the week. Front-month U.S. crude - which did not settle on Thursday due to a U.S. holiday and expires on Friday - ended down 0.28% at $74.93, with a weekly gain of 2.7%. [O/R] "Investors are a little bit nervous about buying stocks right in front of this situation and, more specifically, right in front of this weekend," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. The new sanctions target entities, individuals and vessels providing Iran with defence machinery, and were seen as a sign of a diplomatic approach from the Trump administration. "However, while Israel and Iran carry on pounding away at each other, there can always be an unintended action that escalates the conflict and touches upon oil infrastructure," PVM analyst John Evans said. European foreign ministers urged Iran to engage with the U.S. over its nuclear programme after high-level talks in Geneva about a potential new nuclear deal ended with little sign of progress. Europe's main bourses [.EU] had ended their session a touch higher, following similar gains across Asia. MSCI's gauge of stocks across the globe fell 0.01% on the day. Gains on Hong Kong's Hang Seng, and South Korea's Kospi linked to newly elected President Lee Jae Myung's stimulus, had boosted Asian shares during that session. Federal Reserve policymakers made their first public comments since Chair Jerome Powell said on Wednesday that borrowing costs were likely to fall this year, but that he expects "meaningful" inflation ahead as Trump's tariffs raise prices for consumers. The close split between governors on how to manage the risks was in full view as Governor Christopher Waller said the central bank should consider cutting as soon as the next meeting, while the Richmond Fed's Tom Barkin said there was no urgency to cut. Powell had also cautioned on Wednesday against holding on too strongly to the forecasts. Treasury yields fell after Waller's comments, and as concerns about the Middle East conflict supported demand for safe haven bonds. The yield on benchmark 10-year notes fell 2 basis points to 4.375%, from 4.395% late on Wednesday. Demand rose for the U.S. dollar, pushing the greenback to a three-week high against the yen. The dollar rose 0.03% against a basket of currencies including the yen and the euro , with the euro up 0.3% at $1.1528. The index is poised to rise 0.6% this week. Prices for gold, another traditional refuge, fell 0.13% to $3,365.91 and were poised for a weekly loss. (Reporting by Isla Binnie in New York, additional reporting by Caroline Valetkevitch, Karen Brettel and Georgina McCartney, Editing by Louise Heavens, Rod Nickel and Marguerita Choy)
Hindustan Times
an hour ago
- Hindustan Times
Wirtz wants to 'win everything' for Liverpool after record move
Florian Wirtz said he wants to win it all at Liverpool after completing a blockbuster move from Bayer Leverkusen on Friday, which could reportedly rise to a Premier League record fee. HT Image Reports in England said the Premier League champions will pay an initial £100 million for Wirtz, comfortably surpassing their own record outlay, with a further £16 million in performance-related add-ons making it a British record deal. However, German media suggested the fee could be even higher, starting at 130 million euros with add-ons taking it to 150 million euros. One of European football's elite young stars, Wirtz has been hailed as one of the "best in the world" by former Leverkusen coach and ex-Liverpool midfielder Xabi Alonso, who is the new boss of Real Madrid. "I would like to win everything every year!" Wirtz told the club's website. "In the end, we want to be successful. Last season they won the Premier League so my goal is for sure to win it again and also to go further in the Champions League. I'm really ambitious." The 22-year-old played a crucial role in Leverkusen's greatest season as they claimed a first-ever Bundesliga title and the German Cup in 2023/24 without losing a single game under Alonso. Their only defeat that season, during which Wirtz was crowned Bundesliga player of the year, came in the Europa League final to Atalanta, denying Leverkusen a memorable treble. Bayern Munich restored their grip on the German game last season, with Leverkusen a distant second, and Wirtz is joining an exodus from the BayArena. Netherlands defender Jeremie Frimpong has already made the move from Leverkusen to Liverpool last month. "I'm really excited to have a new adventure in front of me," added Wirtz, who turned down the option of joining Bayern for the move to England. "This was also a big point of my thoughts: that I want to have something completely new, to go out of the Bundesliga and to join the Premier League." After largely keeping their powder dry in the transfer market during Arne Slot's first season in charge, the Reds are splashing out to strengthen a side that romped to a record-equalling 20th English top-flight title. Bournemouth left-back Milos Kerkez is poised to make the move to Anfield in a £40 million deal. Liverpool have also been linked with Newcastle striker Alexander Isak and Crystal Palace centre-back Marc Guehi. Where Wirtz's fits into Slot's plans remains to be seen. He largely played behind a central striker at Leverkusen and has operated from a wider role for Germany. A return of 57 goals and 65 assists in 197 games for Leverkusen is evidence that he carries a threat both as a creator and a goalscorer. "The people say I'm a creative player, and I hope I can bring this creativity to the team and also the joy on the pitch," said Wirtz. "I try to make assists, goals and run for the team to defend. I hope I can just make the team one step better." Liverpool are already blessed with an abundance of forward options, with Mohamed Salah, Luis Diaz and Cody Gakpo all offering a goal threat. However, Diogo Jota, Darwin Nunez and Federico Chiesa now face even stiffer competition to get into Slot's starting line-up, raising the prospect of Liverpool selling some of that trio to free up further transfer resources. kca/smg/ea This article was generated from an automated news agency feed without modifications to text.
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
Fearing China rivals, Stellantis and Renault lobby EU for fewer rules
With Chinese automakers pushing into Europe, Stellantis and Renault are lobbying for a new, less-regulated category of small cars with fewer safety features, making them cheaper to build. Over the last two months, Stellantis Chairman John Elkann and Renault CEO Luca de Meo have engaged in a rare public campaign to get the European Union to consider the matter. The aim is to revive a small car segment largely abandoned by Europe's automakers as such models were unprofitable, a problem they blame on regulations that make the vehicles larger, heavier and more expensive. Elkann last week said Europe needs its own version of Japan's "kei cars", small, urban vehicles with size and engine restrictions that enjoy lower tax and insurance costs - which he said could be called the "e-car". "There's no reason why if Japan has a kei car, which is 40 per cent of the market, Europe should not have an e-car,' he said at an event in Turin, echoing similar comments in a joint editorial with Renault's de Meo published last month. Though de Meo is set to leave Renault in July, the company is expected to maintain its support for the proposal. 'Small cars are a pocket of growth one cannot, and must not, ignore right now,' said Francois Provost, Renault's director of procurement, partnerships, and public affairs. Chinese rivals have so far focused on larger EVs and hybrids in their bid for market share in Europe, but smaller EVs are on the way. The Dolphin Surf from China's BYD hit the market one month ago, priced from under 20,000 euros ($23,124) with features such as a rotating large touch screen and anti-steam rear mirrors. By comparison, the Renault 5, which is similar though can carry one more passenger, costs almost 5,000 euros more when similarly equipped. Facing that pressure, European manufacturers are examining the potential for cheaper cars to help them boost sales and achieve their CO2 targets, said Flavien Neuvy, auto analyst and head of research firm Cetelem. 'The market is down 20 per cent compared with 2019, so there is not enough volume for everyone, and the Chinese are coming,' he said. Though small cars currently account for just 5 per cent of the market, they made up as much as half the market in the 1980s, and the segment could rebound with more launches, said S&P Global, which estimates sales could reach 600,000 by 2030, up about 20 per cent from last year. The lobbying effort targets the EU's General Safety Regulations 2 (GSR2), which mandates safety features such as side airbags, sensors detecting whether a driver is falling asleep, lane-crossing warning, and more thorough crash tests. Such requirements and European rules on pollution add between 850 and 1,400 euros ($983-$1,607) to the cost of a car, estimates a source familiar with the lobbying. Lobbyists argue there is no need for safety requirements like those for high-speed collisions when it comes to small cars designed for city drivers. Backed by industry group the European Automobile Manufacturers Association (ACEA), they want an entirely new vehicle category called M0, or e-car. The European Commission is looking into the matter, said spokesperson Lea Zuber. Revamping requirements for smaller cars without compromising on safety will be complex and will not necessarily be implemented, said people familiar with the discussions. And whether less-regulated models could compete against Chinese EVs also remains to be seen. Matthew Avery, director of strategic development at Euro NCAP, which tests new cars for safety, said the idea that small city cars would not be involved in highway accidents is nonsense. The Chinese are bringing cars to Europe that consistently get five-star ratings from Euro NCAP, said Avery. Although its ratings do not carry legal weight, consumers take them into account and many corporate fleets will not buy cars with less than five stars. A change in regulations to cut some safety requirements could leave smaller European cars with two- or three-star ratings, Avery said. "If they want to, they can de-spec a car for safety," Avery said, but noted Euro NCAP's tests and safety ratings will remain unchanged. "Our job is just to say, well, this car is safer than that car." Emmanuel Bret, deputy head of BYD France, says the company will continue offering small cars that meet all current EU regulations and that blaming the bloc for making them unaffordable is just "a lot of excuses".
