The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut.Market Insiderread more
Markets had expected the central bank to keep its benchmark interest rate steady while setting up a cut at the July meeting.The Fedread more
Powell said policymakers are concerned about some of the recent economic developments and see a growing case for easier policy.The Fedread more
Amazon and Blue Origin founder Jeff Bezos gave more insight into his space company's lunar plans on Wednesday.Technologyread more
As the presidents of U.S. and China near a highly anticipated meeting on trade, the gap in both sides' expectations regarding a deal remains wide.World Politicsread more
Delta warned travelers that a technical problem could delay flights on Wednesday.Airlinesread more
The Fed chief said that despite reports that Trump was looking to demote or fire him, he doesn't plan on leaving anytime soon.The Fedread more
If the Trump administration and Congress fail to reach a spending agreement, the White House will offer to keep the government funded at its current levels for a year, Mnuchin...Politicsread more
With bold and targeted steps, economists say, government can increase opportunity and incomes for many more people in ways that strengthen, not weaken, American capitalism.Politicsread more
Investors need to be cautious because the economy will get hurt the longer the trade war drags on, Jim Cramer says.Mad Money with Jim Cramerread more
Slack Technologies' reference price was set at $26 per share, the New York Stock Exchange announced Wednesday evening.Technologyread more
(Adds analyst quote, updates yields, adds rate cut developments)
NEW YORK, June 10 (Reuters) - U.S. government bond yields rose on Monday, as risk appetite was lifted by the U.S.-Mexico trade and migration deal signed on Friday, tempering expectations of interest rate cuts in 2019.
U.S. President Donald Trump had threatened tariffs on Mexican goods unless Mexico stopped the flow of undocumented immigrants across the two countries' border. On Friday, the tariffs were called off after an agreement was reached.
"Trump's walking back of potential tariffs on Mexican imports has offered a reprieve, not reversal, of the recent bullish price action in Treasuries," wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.
The resolution of the Mexico trade dispute did not fundamentally alter the chances of a deal with China, Lyngen said. The market brushed off Trump's comments on Monday that he was ready to impose another round of tariffs on Chinese imports if he does not reach a deal with China's president at a Group of 20 summit later this month, however.
The benchmark 10-year yield rose 6.3 basis points to 2.145%; the seven-year yield was also 6.3 basis points higher to 2.031%. At the long end, the 30-year yield was up 5.3 basis points to 2.624%. That steepened the yield curve, measured as the spread between the two- and 10-year yields, to 24.3 basis points.
Also bolstering risk sentiment was a drop in interest rate cut expectations for 2019.
On Friday, the 10-year yield hit its lowest since September 2017 as domestic employers hired far fewer workers than expected in May. Weak employment data last week, alongside dovish comments from Fed Chair Jerome Powell, significantly raised expectations of rate cuts in 2019.
Trading off the U.S.-Mexico deal resolution, two-year yields , which reflect market expectations of rate cuts, rose 5.1 basis points to 1.900%. Using CME Group's FedWatch tool, expectations for a rate cut at the Fed's June meeting fell to 19.2% Monday from 25% on Friday and from 66.3% to 65% for the July.
That sentiment was echoed in a note from a Goldman Sachs economist on Monday.
"Although it is a close call, we still expect the (Federal Open Markets Committee) to keep the funds rate unchanged in the remainder of the year," economist Jan Hatzius wrote. Powell's promise to act "as appropriate" was not meant to signal a rate cut, he said, but was merely meant to show the U.S. central bank was not tone deaf to rising trade tensions. (Reporting by Kate Duguid; Editing by Dan Grebler and Sonya Hepinstall)