Latest news with #USTreasurys
Wall Street Journal
5 days ago
- Business
- Wall Street Journal
JGBs Mixed; Gains in U.S. Treasurys May Support
0023 GMT — JGBs are mixed in the early Tokyo session, but may be supported by overnight price gains in U.S. Treasurys spurred by rising Federal Reserve rate-cut hopes. Both JGBs and Treasurys tend to move in tandem. The most significant news was U.S. Treasury Secretary Bessent calling for a 50bp cut in September and suggesting rates should be 150-175 bps lower, NAB's Tapas Strickland says in commentary. Market pricing for a Fed rate cut now has a 'a very small chance' of a greater than 25bp move at 26.7 bps for September versus 24.1 bps on Tuesday, the head of Market Economics notes. The five-year JGB yield is up 1 bp at 1.075%; the 20-year yield is down 1 bp at 2.515%. (
Business Insider
07-08-2025
- Business
- Business Insider
The stock market still has a $7 trillion secret weapon that could boost gains into year-end
Investors might be sitting on a secret weapon that could send stocks soaring. That's according to Wall Street strategists, who say that a big reason to be bullish on stocks in the near term is the record $7 trillion in cash investors have stored in money markets fund. That money — sidelined in assets like US Treasurys, money market mutual funds, and other short-term, highly-liquid debt instruments — could eventually make its way back into equities. That would be a huge boom for stocks, according to Savita Subramanian, the head of US equity and quantitative strategy at Bank of America. "We've still got a lot of cash, still got a lot of fixed income on the plate," Subramanian said, speaking to CNBC on Wednesday, speculating that money could make its way into equities once the Fed resumes its rate-cutting cycle. Central bankers trimmed rates twice in late 2024, but have held off on a third rate cut as they assess the impact of tariffs on inflation. But investors have ramped up bets for rate cuts after a weak July jobs report last Friday, betting that the Fed will cut rates at its September meeting. Markets are pricing in a 95.1% chance the Fed could issue a 25-basis-point rate cut at its next policy meeting, according to the CME FedWatch tool. The return on cash and bonds is also "not great," Subramanian added, another reason investors could eventually plough cash back into the stock market. Others have also touted the potential boost from record amounts of cash coming off the sidelines. Tom Lee, the head of research at Fundstrat, said it is one reason he remains optimistic on equities in a note last month. Lee, known as permabull bull on Wall Street, said he still sees the S&P 500 reaching 6,600 by the end of the year, implying around 4% upside from current levels. "The bull market has proven itself intact," he wrote, referring to the benchmark index's record-breaking rally in recent months. Kristy Akullian, the head of iShares investment strategy in the Americas at BlackRock, also referenced the large amount of cash in money market funds recently. "A portion of those funds could be poised to come off the sidelines if investors — like us — anticipate rate cuts without an accompanying recession," she wrote.
Wall Street Journal
11-07-2025
- Business
- Wall Street Journal
Tariff Threats Weigh on Treasurys, Boosting Yields
The return of tariff threats has put renewed pressure on longer-term U.S. Treasurys. The yield on the 30-year U.S. Treasury bond was recently 4.953%, according to Tradeweb, up nearly 0.1 percentage point from the end of last week.
Yahoo
17-06-2025
- Business
- Yahoo
'Cracks' are forming in foreign demand for US Treasury bonds, BofA says
Foreign investors are reducing US Treasury holdings, signaling future bond volatility, BofA said. Foreign demand for Treasurys is atypically low despite a weaker US dollar and . Concerns over US debt and tariffs are driving investors to diversify away from US assets. Foreign buyers of US Treasurys have been shedding their holdings, raising the possibility of more future turbulence for US government bonds, Bank of America titled said. In a report on Monday titled "Foreign UST Demand Shows Cracks," the bank said that foreign investors, often central banks, are purchasing fewer Treasurys. Megan Swiber, rates strategist at Bank of America, wrote on Monday that US dollar asset holdings have declined over $60 billion since the beginning of April. Foreign participation in the most recent US 20-year Treasury auction was the lowest since July 2020. "The foreign demand trajectory going forward is concerning, especially in light of more global investors looking to reduce US assets or increase hedge ratios," she wrote. Specifically, custodial holdings, or US Treasurys that foreign central banks hold at the Federal Reserve, dropped by $17 billion in the last week and are down $48 billion from late March. The Fed is also conducting fewer reverse repurchase agreements, which could point to lower demand for Treasurys among global central banks. A reverse repurchase agreement allows institutions to lend cash overnight to the Fed in exchange for high-quality collateral, usually in the form of short-term US government bonds. Reverse repurchase agreement balances have declined $15 billion since late March, according to the bank. As seen in the chart below, demand for Treasurys in Q1 of 2025 primarily came from broker-dealers and foreign investors, a trend that may now be reversing. Decreased foreign demand is atypical in times of heightened economic uncertainty and a weak dollar. Usually, central banks buy up US government debt when the dollar falls versus rivals — which has been the case this year with the US dollar index down over 9%. Additionally, historically low interest rates in other parts of the world have led foreign investors to jump into the US Treasury market in pursuit of higher yields, Torsten Sløk, Apollo's chief economist said recently. As a result, foreign investors have accumulated record-high exposure to US government bonds with a maturity of over 10 years, meaning that any adjustments they make to their holdings will have an outsize impact on the bond market. BofA said that it appears now that foreign investors are cutting back on their US Treasury investments, as deficit concerns and general growth worries stemming from tariffs and the tax bill hurt their appeal as safe-haven assets. Read the original article on Business Insider Sign in to access your portfolio
Wall Street Journal
12-06-2025
- Business
- Wall Street Journal
Rate-Cut Optimism Buoys Wall Street
Bond investors are growing more optimistic that the U.S. economy is on track for lower interest rates. Government bonds extended their rally on Thursday, pulling yields on 10-year U.S. Treasurys below 4.4% to notch a fourth-straight day of declines. Benchmark yields settled at 4.357%, down from 4.413% the day prior. Yields fall as bond prices rise.
