The arguments are mounting for the US Federal Reserve (Fed) to release the accelerator on the path of rate cuts in which it is already immersed, with higher inflation, a labor market that continues to show signs of resistance and an economy that remains stable. growing. All this led to US debt maturing in ten years, the T-Noteto reach maximum profitability of July this week, when it touched 4.247% on Wednesday. Although on Friday these purchases relax in the American sovereign bond, the purchases are the protagonists in the weekly balance.
The profitability of US debt has experienced a particular comeback. Ten-year debt securities have gone from 3.6% to 4.25% in a very short time, with a debt market that reflects the possibility that the Fed will not be as tough as expected (it is assumed that the agency I can execute another cut jumbo of 50 basis points like the one it made in September). The behavior of German debt maturing in a decade has been different in recent days, and sales have been somewhat more predominant this week in this market.
In fact, this disparity in the behavior of both references has led to the differential between both reaching maximums this week not seen since the end of May 2024. On Wednesday, specifically, the ten-year German bond reached 2.3 % return in the secondary market while its US counterpart exceeded 4.2%. This placed the difference between the two, what is commonly known as the risk premium, above 190 basis points not seen in five months.
The presidential elections in the US, which are just around the corner (will be held on November 5) also bring greater volatility to the fixed income market. Although the expectations placed on the Fed force the separation of both bonds, the polls that give Donald Trump an advantage in the presidential race also tense the debt market with the understanding that his victory would bring higher inflation. “The bond market is beginning to price in the arrival of Trump,” they indicate in a report from Banca March.
#American #bond #hits #July #highs #purchases #relax #week
