AIRLINK 72.01 Decreased By ▼ -0.17 (-0.24%)
BOP 4.97 Increased By ▲ 0.04 (0.81%)
CNERGY 4.38 Increased By ▲ 0.03 (0.69%)
DFML 30.10 Increased By ▲ 1.61 (5.65%)
DGKC 81.42 Increased By ▲ 0.12 (0.15%)
FCCL 21.25 Decreased By ▼ -0.25 (-1.16%)
FFBL 32.25 Decreased By ▼ -0.80 (-2.42%)
FFL 9.87 Increased By ▲ 0.01 (0.1%)
GGL 10.42 Decreased By ▼ -0.06 (-0.57%)
HBL 113.50 Decreased By ▼ -0.50 (-0.44%)
HUBC 137.49 Decreased By ▼ -2.51 (-1.79%)
HUMNL 10.03 Increased By ▲ 1.00 (11.07%)
KEL 4.66 Decreased By ▼ -0.07 (-1.48%)
KOSM 4.47 Increased By ▲ 0.09 (2.05%)
MLCF 37.45 Decreased By ▼ -0.20 (-0.53%)
OGDC 133.40 Decreased By ▼ -0.30 (-0.22%)
PAEL 25.82 Increased By ▲ 0.22 (0.86%)
PIAA 24.28 Increased By ▲ 0.30 (1.25%)
PIBTL 6.48 No Change ▼ 0.00 (0%)
PPL 120.90 Decreased By ▼ -1.72 (-1.4%)
PRL 27.13 Increased By ▲ 0.06 (0.22%)
PTC 13.77 Increased By ▲ 0.17 (1.25%)
SEARL 58.30 Increased By ▲ 1.68 (2.97%)
SNGP 68.05 Decreased By ▼ -1.19 (-1.72%)
SSGC 10.25 Decreased By ▼ -0.09 (-0.87%)
TELE 8.65 Increased By ▲ 0.20 (2.37%)
TPLP 11.20 Decreased By ▼ -0.08 (-0.71%)
TRG 61.73 Increased By ▲ 0.52 (0.85%)
UNITY 25.30 Decreased By ▼ -0.03 (-0.12%)
WTL 1.58 Increased By ▲ 0.08 (5.33%)
BR100 7,583 Decreased By -46.5 (-0.61%)
BR30 24,869 Decreased By -121.1 (-0.48%)
KSE100 72,460 Decreased By -141.8 (-0.2%)
KSE30 23,369 Decreased By -169.1 (-0.72%)

US Treasuries rallied on Wednesday, taking the benchmark 10-year yield to a 14-month low, after the Federal Reserve said it would hold interest rates steady and its policymakers abandoned projections for further rate hikes this year while flagging an expected economic slowdown. In a major shift in its perspective, the US central bank also expects to raise borrowing costs only once more through 2021, and no longer anticipates the need to guard against inflation with restrictive monetary policy.
The two-year Treasury yield, which is a proxy for investor sentiment about interest-rate hikes, logged its largest daily drop since Jan. 3 and was last at 2.402 percent. The benchmark 10-year yield, which reflects investor sentiment about the overall health of the economy, fell by as much as 8 basis points to the lowest since January 2018 and was last at 2.539 percent. The change in the Treasury market was significant enough that yields on two-, three-, five- and seven-year notes were below that of short-dated three-month bills, which last returned 2.464 percent.
The US bond market's gauges on investors' inflation views also turned higher on Wednesday. The yield spread between 10-year Treasury Inflation Protected Securities and regular 10-year Treasuries was 1.971 percent, which was near its highest level since early December. This was nearly 2 basis points higher from late on Tuesday, Tradeweb data showed. The Fed also said it would slow the monthly reduction of its Treasury bond holdings from up to $30 billion to up to $15 billion beginning in May. It said it would end its balance sheet runoff in September provided the economy and money market conditions evolved as expected.
"(The statement) definitely skewed on the dovish side of expectations. The main surprise is that the Fed projects zero hikes in 2019. Whereas our broad expectation, and the expectation of consensus, was for them to leave in at least one hike in 2019," said Evan Brown, head of macro asset allocation strategy at UBS Asset Management.

Copyright Reuters, 2019

Comments

Comments are closed.