Waiting for the Fed decision stirred up even government bonds

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Waiting for the Fed decision stirred up even government bonds
August 22
09:00 2018

The yield on 30-year government bonds has increased. During the bidding process on Tuesday, it rose above 3%.

This week is very important for world markets. From August 23 to August 25, the Fed will be holding a symposium in Jackson Hole. It will bring together representatives of central banks of different countries and economists. A speech by Fed Chairman Jerome Powell will become one of the most important events during the symposium. The financiers will see the Fed Chairman speak on Friday.

On August 22nd, the Market Committee is planning to publish the minutes of the meeting held on July 31-August 1. This can affect the movement of markets. However, everyone is waiting for the results of the symposium.

There is a growing recognition among traders that despite the trade conflict with China and the crisis in Turkey, the Fed will raise the key interest rate. Probably, this decision has been already made and all that’s left is to announce it at the symposium.

In Jackson Hole it will be possible to hear the experts’ views why the regulator continues a credit and financial policy tightening and how true this is. The representatives of the world central banks will take the floor too. They will likely discuss the Fed’s initiative.

The 30-year US Treasuries have risen to 3.012%. On Monday, trading closed at 2.985%. Now 2-year securities are being traded with the yield of 2.595%, and 10-year securities – 2.833%. Probably, the increase in profitability is connected with growing unrest before the symposium. By the end of this week the situation will be fully clarified.

 

The material was prepared with the participation of Anjela Chromova,
a leading analyst of the brokerage company CT Trade

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