Ekonomické zprávy
22.01.2025

US bond yields are showing negative dynamics

Treasury bond yields have declined slightly, while market participants are preparing for the publication of new statistics and are closely monitoring Donald Trump's statements, hoping to get clues about the impact of his policies on the US economy.

The yield on 5-year Treasury bonds fell by 0.6 basis points, reaching 4.392%, while the yield on 30-year bonds was 4.798% (-0.5 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, declined by 0.9 basis points to 4.272%, while the yield on 10-year bonds fell to 4.57% (-0.4 basis points).

Since taking office, Trump has signed more than 40 executive orders, including the US withdrawal from the Paris Climate Agreement, pardoning about 1,500 people, and ending diversity, equity and inclusion programs. In addition, he declared a state of emergency in the country's energy sector, which, according to him, will speed up the drilling of oil and gas wells. Trump also said he is considering imposing 25 percent tariffs on Mexico and Canada from February and 10 percent tariffs on China. President also announced a joint venture called Stargate, which will pump billions of dollars in private funding into artificial intelligence infrastructure in the United States. Oracle, Softbank and OpenAI said they plan to spend approximately $500 billion over the next four years on the venture.

Today, investors will continue to follow Trump's comments, as well as pay attention to the leading index for December, which will be published at 15:00 GMT. This index surprised with an increase in November, and added 0.3%. The monthly increase was mainly due to an increase in the number of building permits, stock prices, the average length of the working week and a decrease in the number of applications for unemployment benefits. Although the rise in November was an encouraging sign that economic growth is continuing at a steady pace, the index's predictive power has lost its appeal this cycle. With the exception of the unchanged reading at the beginning of 2024 and the positive reading in November, the index has steadily declined since 2022 without a significant reduction in total economic output. Moreover, the recent upswing does not seem to be a turning point for the index. According to forecasts, the index fell by 0.1% in December after increasing by 0.3% in November.

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