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Mecklai graph of the day: US 10 year bond Yield

Mecklai graph of the day: U.S. Treasury prices rose this week, recovering from losses last week, as fiscal challenges in the United States and political uncertainty in Europe underpinned appetite for safehaven assets.

November 27, 2012 / 06:24 PM IST

Mecklai graph of the day: US 10 year bond Yield


U.S. Treasury prices rose this week, recovering from losses last week, as fiscal challenges in the United States and political uncertainty in Europe underpinned appetite for safehaven assets. Despite accommodative monetary policy via QE3, yields on U.S. Treasuries remained range bound where buyers and sellers were indecisive on the direction of the market. However, with the latest weakness in risk assets as market watchers point to uncertainty surrounding the Fiscal Cliff.


The combination of Federal Reserve efforts to stimulate the economy by buying bonds and the potential slowdown should politicians fail to avert the so-called fiscal cliff of tax increases and spending cuts has made Treasuries the debt that money managers have to own. “Uncertainty” about the fiscal cliff, debt limits and the long-term challenges of balancing the U.S. budget are already “affecting private spending and investment decisions and may be contributing to an increased sense of caution in financial markets, with adverse effects on the economy. As we progressed towards end of 2012 and uncertainty looms round the corner we would expect the cap in bond yields going ahead to trade back between 1.60-1.80.


The below graph shows the movement of US ten year bond yield.



 


 


 


 


 


 


 


 


 


 


 


 


 


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first published: Nov 27, 2012 06:00 pm

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