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Treasury Yields Rise while US Economic Concerns Weaken the Dollar

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While the dollar and oil prices faltered due to growing concerns about US growth, US Treasury rates recovered some of their losses on Wednesday as the House of Representatives moved forward with President Donald Trump’s tax-cut proposal. Following a volatile Wall Street session, US stock futures recovered, with SP 500 futures up 0.45% and Nasdaq futures up 0.6%.

Similarly, EUROSTOXX 50 futures increased by 0.66%, while FTSE futures added 0.7%. Futures for the DAX rose 0.84%. After Trump on Tuesday ordered an investigation into possible new duties on copper imports, U.S. copper prices rose more than 4% overnight while those in other countries plummeted.
Trump’s $4.5 trillion tax cut plan was just barely approved by the Republican-controlled U.S. House of Representatives late Tuesday. The budget resolution will now be submitted to the Senate, where Republicans are anticipated to consider it.

As investors expect additional debt issuance in the future, U.S. Treasury yields increased in response to the news, with the benchmark 10-year yield climbing 3 basis points to 4.3289%.”The plan proceeded slightly more quickly than anticipated,” IG market analyst Tony Sycamore stated. “You can observe how yields are changing; it definitely took them by surprise.

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