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Short-term US government debt related to rising inflation

The smaller U.S. government bond was sold Wednesday after a report showing that consumer prices had risen sharply last month since 1990 expressed concern that the Federal Reserve should take action to curb inflation.

The two-year Treasury index, which is known to be highly volatile with financial expectations, continued to sell sharply since the market reached coronavirus crisis in March 2020. Yields jumped 0.09 percent to 0.493 percent, indicating a sharp decline in prices.

Long-term bonds have risen sharply after Fed chairman Jay Powell last week vowed to take a “patient” approach to raising interest rates in the hope that inflation would be temporary. However, reports released Wednesday show that U.S. consumer prices rose 6.2 percent in October from the same month in 2020, exceeding expectations of 5.8 percent, citing the promise.

“There are concerns that the Fed will abandon its shortcomings and attract interest from the market,” said Chris Jeffery, head of pricing and pricing at Legal & General Investment Management.

Such a move could impede economic growth, he added, “so people are looking for [the central bank] bring the price up first and then release them later. ”

The long-term economy, which provides an overview of what investors’ expectations are expected for future economic growth and inflation, was well off on Wednesday’s trading session. 10-year yields rose 0.03 percent to 1.487 percent.

Concerns over inflation were further exacerbated by the release on Wednesday, which shows that China’s inflation rate – the rate at which businesses pay for goods – rose 13.5 percent in October since the same period last year, the largest jump in 26 years. high electricity prices.

Short-term trading in the Treasuries reached the Wall Street equities market. Nasdaq Composite, which has professional companies whose high accountability is supported by low interest rates, fell by 1 percent. The blue-chip index S&P 500, which is very similar, fell by 0.5%.

Equity markets have risen sharply in recent weeks despite concerns over rising prices, as business changes have shown that many companies have been offering higher prices to their customers rather than losing profits.

S&P closed its section very long line for the period since Monday Monday, when the European Stoxx 600 share index, which traded Tuesday, has risen 16 of the last 20 quarters.

Shares in Marks and Spencer rose to 15 percent Wednesday, after food and clothing retailers in the UK. promoted Predictions for what he earned as a result of what he called “financial recovery” and even “obvious problems”. [that] it will go up slowly. ”

Asian markets collapsed Wednesday due to rising Chinese commodity prices, which Jeffery’s L&G said “hope to see a financial plan “from Beijing to support a sick home sector.

China CSI 300 share index fell 0.5% while the Nikkei 225 in Tokyo closed 0.6% down.

Other market trends:

  • The US dollar’s high yields have gained a new annual record of more than $ 466bn, surpassing the total for 2020 by about $ 460bn. Revealing the growing number of major open-air markets for companies seeking to repay or repay loans, GE announced it would issue $ 23bn on its bonds on Wednesday.

  • Brent crude, an oil benchmark, rose 0.3% to $ 85.07 a barrel.

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