by Ruth Carson and Matthew Burgess
Global bonds rallied Tuesday, echoing overnight gains in US Treasuries, as bets for an early Federal Reserve interest-rate cut bolstered the appeal of sovereign debt.
Yields on Australian and New Zealand 10-year bonds fell at least eight basis points after data showed US factory activity shrank in May at a faster pace as output came close to stagnating. Yields on Japan’s 10-year notes retreated two basis points ahead of a ¥2.6 trillion ($16.6 billion) debt auction later Tuesday. Elsewhere, South Korean securities also advanced.
The renewed optimism in bonds may be tested in the coming days as a raft of employment figures shed light on whether the US jobs market is cooling sufficiently to warrant policy easing. Traders’ previous bets for Fed rate cuts proved to be premature after Chair Jerome Powell stressed the need for more evidence that inflation is on a sustained path to the 2% goal before reducing borrowing costs.
Rate decisions by the Bank of Canada and European Central Bank will also be on traders’ radar.
“Investors seem to be happy to scale in as cuts get closer and closer,” said Robert Thompson, macro rates strategist at RBC Capital Markets in Sydney. “Not just from the Fed though — this week of course is about the BOC and ECB, both of which we and markets expect to kick off cutting cycles.”
Treasury 10-year yields edged up two basis points to 4.41% on Tuesday after sliding 11 basis points on Monday. Upcoming US jobs opening data due Tuesday may also fuel renewed demand for bonds if the numbers trail economists’ expectations.
“Levels had gotten cheap last week,” said Martin Whetton, head of markets strategy at Westpac Banking Corp. “Lately it has been a challenge to string two consecutive days of gains for fixed-income markets together but we’ve just had them.”
Copyright Bloomberg News
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.