U.S. Treasury yields were little changed so far in European morning trading on Friday, September 22, 2023, as investors considered what might lie ahead for the economy and the outlook for interest rates after this meeting of U.S. central bankers at the Federal Open Market Committee of the reserve system (FOMC FED – Federal Open Market Committee Federal Reserve System), which took place on 19 and 20 September 2023 and left the current interest rates unchanged at 5.25 – 5.50% p.a., but with the fact that until at the end of this year, 2023, further rate increases can still be expected.
Currently, during the European Friday morning on September 22, 2023, at approximately 10:54 CET, most US Treasuries were moving in a slight decrease in their daily returns compared to yesterday’s trading day. For example, the 10-year US government bond (US 10-YR Bond) traded at a yield of 4.474% p.a. on the indicated day and time. with a daily decrease of only -0.6 basis points in its yield so far. In contrast, the 30-year US government bond (US 30-YR Bond) has so far posted a daily yield of +0.6 basis points higher to a yield value of 4.558 per year. Furthermore, the three-year US Treasury bond increased its daily yield by +3.2 basis points and traded with a yield of 5.516% per year, while the two-year US Treasury bond saw its yield decrease, but very slightly, by 1 basis point and thus achieved an annual return of 4.138 percent.
These US government bond yields were achieved in a situation where the exchange value of the US dollar as measured by the US Dollar Currency Index (DXY) strengthened. The point status of this DXY index was on 22/09/2023, at approximately 10:54 CET, at a value of USD 105.58 points with a daily growth of + 0.21% of the point value according to this index, which compares the value of the US dollar (USD) with another six major world currencies. Thus, on the indicated day and time, the global currency pair of the single European currency Euro (EUR) and the US dollar, as the main currency of the commodity markets, moved at a mutual exchange rate of USD 1.065 per EUR with a daily decrease of EUR by -0.122% against USD. The international foreign exchange market, in connection with the strengthening USD, also affected the British pound (GBP), whose exchange value fell similarly to the euro, and in the framework of forex operations, this currency pair GBP/USD was traded at the rate of 1.225 USD per GBP, with the daily decrease of GBP by – 0.339 % of the exchange rate against the USD.
According to economic correspondents in connection with analysts of brokerage companies and financial strategists of investment banks, the current level of US government bond yields in recent days was influenced by the factors of the economic development of the United States and in particular the recent decision of the FOMC FED on rates as well as data from the US labor market. Initial weekly jobless claims for 9/21/2023 on Thursday came in lower than expected at 201,000, which some traders saw as a sign that further interest rate hikes may be needed to cool the economy, including the labor market, which it hasn’t happened yet, and after the last FOMC FED meeting, which ended on Wednesday 9/20/2023, rates remained unchanged. The US central bank, the FED, said it would leave interest rates unchanged for the time being, but added that the next rate increase is likely to come this year. The Fed’s FOMC also suggested that rates will stay higher for longer as it reduced the number of rate cuts it expects next year to roughly two percent.