Will US Bond Yields Rally after the FOMC Statement?
The bond markets are the most impacted asset class by any changes to the Federal interest rates.
Interest rates and equity markets usually have an inverse relationship.
In its efforts to revive the US economy from the Great Recession, the US Fed started purchasing US government-backed securities in 2008.
Slow US inflation growth has been a concern for the US Fed and was one of the key reasons that the Fed raised interest rates only twice in 2017.
Since the last FOMC meeting in July, economic conditions in the US have continued to improve.
In this series, we’ll examine the improvements in the US economy since the last Fed meeting and discuss whether these developments could warrant accelerated tightening from the Fed.
After falling to multiyear low price levels, the US Dollar Index rebounded last week. The US Dollar Index started this week on a stable note.
At 6:05 AM EST, the FTSE 100 Index is trading at 7,279.25—a rise of 0.35%. On September 18, the iShares MSCI United Kingdom (EWU) rose 0.03%.
On September 19, 2017, the Shanghai Composite Index fell 0.18% and ended at 3,356.84. The SPDR S&P China ETF (GXC) rose 1.1% and closed at 104.38.
The British pound is headed for its fourth weekly positive close in a row backed by the strong August inflation print and the hawkish statement from the Bank of England.
Inflation in the United Kingdom has been on a higher trajectory with consumer prices in the United Kingdom rising 2.9% in August year-over-year.
At its September meeting, the Bank of England left the benchmark interest rates unchanged at 0.25%.
The S&P 500 started this week on a stronger note. It rose on September 18 and carried the buying momentum forward from last week.
The US bond markets (BND) turned around in the previous week as bond yields edged up higher.
Crude touched $50 yesterday, but that’s not a game-changer from a technical standpoint.
The S&P 500 started last week amid improved global market sentiment. The market rose in four out of five trading days last week.
At 6:15 AM EST on September 18, the FTSE 100 Index is trading at 7,230.25—a rise of 0.2%. On September 15, EWU rose 0.06% and closed at 34.53.
On September 18, 2017, the Shanghai Composite Index rose 0.53% and ended at 3,362.86. The SPDR S&P China ETF (GXC) rose 0.54% and closed at 103.20.