FXStreet (Mumbai) - The short duration treasury yields in the US spiked on Tuesday ahead of the Thursday’s FOMC rate decision.
The 2-year yield rose to a high of 0.8%; its highest since April 2011 and confirmed a break above the multi-week range of 0.65%-0.75%. The yield is known to represent the short-term interest rate expectations in the US.
The yield currently trades around 0.786%; down one basis point on the day. Meanwhile, the 10-year treasury yield currently trades around 2.265; down 1.6 basis points on the day.
The rise in the two-year yield contradicts the fed funds futures, which indicate only 30% probability of a rate hike in the US. The market still stands divided over the prospect of a rate hike tomorrow.
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