Recent data on producer prices and jobless claims have led to changes in trader expectations regarding the Federal Reserve's actions.
US Bond Market Reacts to Data
On Thursday, US Treasury prices surged sharply, pushing yields down by six to seven basis points. This marked the most significant one-day drop in a week. The increase came in the wake of data on producer prices for May and a decrease in jobless claims.
Rise in European Bonds and Drop in Oil Prices
On the same day, European bonds, especially UK government securities, also rose, while oil prices fell about half of Wednesday's gains. These changes helped propel the US market further, resulting in even lower Treasury yields.
30-Year Bond Auction: What to Expect
At 1 p.m. New York time, the Treasury will auction 30-year bonds for the first time since the yield reached 5.15% on May 22 following the US credit rating downgrade. Many economists expect that along with the upcoming meeting of the Federal Open Market Committee, the current interest rate will remain at the 4.25%-4.50% level.
Thus, strong employment and pricing statistics continue to influence traders' expectations regarding the potential for Federal Reserve rate cuts in 2025.
