Yields Shining, Fed Pressured To Tighten Policy
US Treasury yields sparkled with a stunning result, with 10-year yield hitting the 4-year maximum of 2.712% (+4.6 bps). Investors consider tax reform to be the main catalysis for such rise. At this point, considering all the improvement, Fed will be very much pressured to execute some policy tightening. The yield on the 2-year note rose 3.7 bps (1.7%) to the 9-year maximum of 2.156%. The yield on the 30-year bond also increased hit 2.948%.
In the meantime, the USD index is up near 0.3% to 89.10. The greenback is seemed to be recovering from last week’s volatility caused by Steven Mnuchin’s comments. This week includes lots of important data, such as US Personal Capital Expenditure, ISM and Non-Farm Payrolls. Additionally, Fed will have a meeting and Donald Trump will deliver his remarks about dollar’s dynamic in the State of Union, where the President is also expected to discuss jobs, the economy, infrastructure, immigration, trade and national security.