August 21, 2018 / 6:44 PM / 3 months ago

TREASURIES-Yields rise on risk appetite; Fed chair's remarks awaited

(Adds quotes, updates prices)

* Fed minutes on Wednesday, Powell speech on Friday in focus

* Trump “not thrilled” with rate increases under Powell

* U.S. and China to meet for trade talks

By Karen Brettell

NEW YORK, Aug 21 (Reuters) - U.S. Treasury yields rose on Tuesday on improving risk appetite, though investors were keenly awaiting a speech by Federal Reserve Chairman Jerome Powell at the end of the week.

The benchmark S&P 500 hit an all-time intraday high on Tuesday, while also matching its longest-ever bull-market run.

“It’s risk-on (with) higher stocks,” said Mary Ann Hurley, vice president in fixed-income trading at D.A. Davidson in Seattle, adding that “the big thing of the week is going to be Jerome Powell’s comments on Friday.”

Investors are looking for insight on whether the Fed, which has already raised interest rates twice this year, will hike rates two more times by year-end.

The release on Wednesday of the minutes from the Fed’s August meeting was also awaited.

Expectations for two additional rate hikes this year declined on Tuesday, the day after President Donald Trump told Reuters that he was “not thrilled” with the Fed under Powell, his own appointee, for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.

Futures traders are pricing in a 96 percent chance of a rate hike in September, up from 94 percent on Monday, and a 63 percent chance of a further increase in December, down from 64 percent, according to the CME Group’s FedWatch Tool.

“The overtone of Trump trying to persuade the Fed to stop aggressively tightening is probably one thing the market’s focused on,” said Tom di Galoma, a managing director at Seaport Global Holdings in New York. “The big trade overnight has been the weakness of the dollar because of Trump’s comments.”

Powell is to speak on Friday at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming.

“The Fed is going to guard its independence very, very carefully,” Hurley said. “You could see Jerome Powell hit back a little, not per se by naming (Trump) but going on why they still feel policy is accommodative.”

In the middle of international trade disputes, Trump also accused China and Europe of manipulating their respective currencies and said that he does not expect much progress from trade talks with China this week in Washington.

Benchmark 10-year notes fell 7/32 in price to yield 2.848 percent, up from a low of 2.815 percent on Monday, the lowest since July 6.

The yield curve between 2-year and 10-year notes steepened to 24 basis points, from 23 basis points on Monday, which was the flattest level since 2007.

Reporting by Karen Brettell Editing by Susan Thomas and Leslie Adler

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below