U.S. long-term interest rates fell last night after a rise of about a week and continued to fall today.
The most significant news last week was the consolidation of Democratic power in the United States, which strengthened investor recovery expectations. Incoming Democratic President Joe Biden has promised a revival of “trillions” that will be easier to implement now that Democrats have a majority in both the Senate of Congress and the House of Representatives.
The fixed income market has contributed to the auction of ten-year loans organized by the United States yesterday. The interest rate on the ten-year loan peaked at ten months yesterday.
The interest rate on the five-year US loan has also risen markedly recently, but it has also fallen. The market has thawed an estimate that the US Federal Reserve could start raising interest rates as early as 2023, which would be earlier than previously expected by the market.
Concerns have eased after the Fed James Bullard and Eric Rosengren signaled that tackling the economic impact of the interest rate crisis remains the number one priority for the central bank, and that the central bank would not be reducing its purchases of securities in the near future.
The European Central Bank also signaled its readiness to pursue a accommodative monetary policy. Member of the Governing Council Francois Villeroy from Galhau said recently the ECB’s line will remain light for as long as necessary.
At the time of the review, the interest rate on the ten-year US loan was 3.4 basis points, down 1.095 per cent from a high of 1.1838 per cent yesterday.
The dollar, which strengthened last week, weakened yesterday, but started to strengthen again this morning. At the time of the review, the euro received $ 1.2175 and the dollar 103.29 Japanese yen.
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