Latest news with #TreasuryYields
Reuters
a day ago
- Business
- Reuters
Gold at over one-month high as weak dollar, bond yields lift appeal
July 22 (Reuters) - Gold prices climbed on Tuesday to their highest level in more than a month, supported by a weaker U.S. dollar and lower Treasury yields, as investors looked for progress in trade talks ahead of an August 1 deadline. Spot gold was little changed at $3,389.98 per ounce, as of 0503 GMT. Earlier in the session, bullion hit its highest level since June 17. U.S. gold futures held their ground at $3,402.90. "Gold's move on the upside has been pretty much supported by positive technicals and as well as reinforced by a broad base of dollar weakness," OANDA senior market analyst Kelvin Wong said. The U.S. dollar index (.DXY), opens new tab was hovering near a more than one-week low against its rivals, making greenback-priced gold less expensive for other currency holders. Benchmark 10-year U.S. Treasury yields hit a more than one-week low on Monday. USD/US/ The European Union is exploring a broader set of possible countermeasures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats. U.S. President Donald Trump has threatened 30% duties on imports from Europe if no agreement is signed before the August 1 deadline. "There could be a possibility that U.S. and the respective trading partners may not agree to the terms and condition and that potentially could see a bit of uncertainty and there could be some hedging activities by market participants going forward," Wong said. Also on radar, the European Central Bank is expected to hold interest rates steady at 2.0% following a string of cuts at the end of its policy meeting on July 24. The U.S. Federal Reserve's monetary policy is scheduled for next week. Traders are pricing about a 59% chance of a rate cut by the Fed in September, according to the CME FedWatch Tool. Gold tends to perform well in a low-interest-rate environment. Spot silver fell 0.5% to $38.71 per ounce, platinum added 0.3% to $1,442.55 and palladium fell 1.3% to $1,250.19.
Reuters
a day ago
- Business
- Reuters
Gold steadies at over one-month high as weak dollar, bond yields lift appeal
July 22 (Reuters) - Gold prices climbed on Tuesday to their highest point in more than a month, supported by a weaker U.S. dollar and lower Treasury yields, as investors looked for progress in trade talks ahead of an August 1 deadline. Spot gold was unchanged at $3,390.69 per ounce, as of 0258 GMT. Earlier in the session, bullion hit its highest level since June 17. U.S. gold futures held their ground at $3,405.20. "Gold's move on the upside has been pretty much supported by positive technicals and as well as reinforced by a broad base of dollar weakness," OANDA senior market analyst Kelvin Wong said. The U.S. dollar index (.DXY), opens new tab was hovering near a more than one-week low against its rivals, making greenback-priced gold less expensive for other currency holders. Benchmark 10-year U.S. Treasury yields hit a more than one-week low on Monday. USD/US/ The European Union is exploring a broader set of possible counter measures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats. U.S. President Donald Trump has threatened 30% duties on imports from Europe if no agreement is signed before the August 1 deadline. "There could be a possibility that U.S. and the respective trading partners may not agree to the terms and condition and that potentially could see a bit of uncertainty and there could be some hedging activities by market participants going forward," Wong said. Also on radar, the European Central Bank is expected to hold interest rates steady at 2.0% following a string of cuts at the end of its policy meeting on July 24. The U.S. Federal Reserve monetary policy is scheduled for next week. Traders are pricing about a 59% chance of a rate cut by the Fed in September, according to the CME FedWatch Tool. Gold tends to perform well in a low-interest-rate environment. Spot silver eased 0.2% to $38.84 per ounce, platinum added 0.8% to $1,449.11 and palladium fell 0.2% to $1,262.89.
Yahoo
2 days ago
- Business
- Yahoo
TLT Surges on Weaker Leading Economic Indicators Data
The iShares 20+ Year Treasury ETF (TLT) climbed today, as falling Treasury yields signal investors anticipate a weakening U.S. economy during the second half of 2025. That reaction followed the release of the June Leading Economic Index (LEI), which fell 0.3% after a flat reading in May and declined 2.8% during the first half of the year, more than double the pace seen during the second half of 2024. Although a strong stock-market rally limited the fall, the deeper trend points to underlying economic stress. 'The U.S. LEI fell further in June,' Justyna Zabinska-La Monica, The Conference Board's senior manager of business cycle indicators said in a statement. 'For a second month in a row, the stock price rally was the main support of the LEI. But this was not enough to offset still very low consumer expectations, weak new orders in manufacturing and a third consecutive month of rising initial claims for unemployment insurance. TLT was up a sharp 1.3% during midday trading following the report, while stocks resumed their upward trajectory with the S&P 500 rising 0.5%. TLT vs. VOO: Stocks Rally, But Bonds Warn Despite the S&P 500 hitting fresh highs, buoyed by roaring equity momentum, the LEI components tell a different story. Weak consumer confidence, soft new orders in manufacturing and a spike in initial jobless claims weighed heavily on the index . This divergence led TLT investors to anticipate an economic drag in the back half of the year, while equity markets continue their ascent, seemingly climbing a wall of worry, as the stock market proxy Vanguard S&P 500 ETF (VOO) has rallied 27% since the post-Liberation Day tariff pause. Source: & Factset data Tariffs, Inflation and Consumer Spending Risk A major concern now is the return of U.S. tariffs on Aug. 1, which could drive import prices higher, stoke inflation and squeeze consumers. Since consumer spending accounts for roughly two-thirds of U.S. GDP, weaker household demand due to rising prices can slow the economy. With unresolved trade issues and tariff risks looming, bond markets are already pricing in slower growth—while equities maintain their calm. LEI's Recession Signal: History Offers a Warning While the LEI isn't a perfect forecast tool, it's a widely respected leading recession indicator, typically with a lead time of six to 12 months. The Conference Board's '3Ds' test, which looks at six-month diffusion and growth, flagged a recession signal: Diffusion remains below 50, and the index has contracted more than 4.1% annualized. Historically, such readings often precede economic slowdowns. That suggests today's LEI weakens investor confidence in prolonged market strength. Strengths of the LEI as a Prediction Tool The LEI has a strong historical track record of peaking and declining before recessions. Consistent declines over several months, particularly when the six-month growth rate falls below a certain threshold and the diffusion index (indicating how widespread the declines are among components) is below 50, have often preceded economic downturns. Comprehensive Nature By combining 10 different indicators that cover various aspects of the economy (e.g., manufacturing, employment, housing, financial markets, consumer expectations), the LEI provides a more holistic and reliable signal than any single indicator alone. Forward-Looking As a "leading" indicator, its explicit purpose is to anticipate turning points in the business cycle, offering an early warning system for investors, businesses and policymakers. Limitations of LEI While it's often accurate, the LEI is not infallible. There have been instances where the LEI signaled a potential downturn but a recession did not follow, sometimes referred to as "false positives." This can happen if the underlying economic conditions shift or if other factors mitigate the LEI's signal. Furthermore, the LEI doesn't provide details about the severity or duration of a potential recession or expansion, and it is subject to revisions. Context is Key The LEI should always be used in conjunction with other economic indicators and market analyses. Relying solely on the LEI can lead to incomplete or misleading conclusions. For example, some critics argue it may be overly biased towards the goods sector and might not fully capture the dynamics of a services-dominated economy. Bottom Line Though the LEI isn't foolproof, its historical reliability during six-month declines and low diffusion readings highlight the potential market risk over the next six to 12 months, hence TLT's price rise Monday reflecting investor expectations for slower growth during 2025's second half, despite a strong stock market. The return of tariffs on Aug. 1 could solidify this slowdown via inflation, which may lead to slower consumer spending, an economic engine for the U.S. and global economies. In short, while markets chase record highs, economic indicators like the LEI suggest warning lights are flashing. Keeping portfolios balanced and flexible could prove critical in the months to come. Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions. At the time of publication, Kent Thune did not hold a position in any of the aforementioned | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Dow futures turn higher as investors brace for a big week of earnings, housing market data and Jerome Powell
Markets were little changed on Sunday ahead of a busy week for investors, who can expect another flood of corporate earnings, economic data and comments from central bankers. Meanwhile, upper-house parliamentary election results from Japan could ripple through global bond markets and jolt U.S. Treasury yields. U.S. stocks signaled a calmness on Sunday night that belied a busy week ahead that includes a flood of corporate earnings, economic data and comments from central bankers. Futures tied to the Dow Jones Industrial Average ticked up 44 points, or 010%, reversing an earlier dip. S&P 500 futures were up 0.11%, and Nasdaq futures rose 0.17%, also turning higher. The yield on the 10-year Treasury edged down 1.1 basis points to 4.42%. The U.S. dollar was flat against the euro and down 0.22% against the yen, after upper-house parliamentary elections in Japan delivered a disastrous blow to Prime Minister Shigeru Ishiba's coalition. Earlier forecasts for a poor result for Ishiba had already sent Japanese government bond yields to multi-year highs as investors expected the election to clear the way for more government spending and tax cuts. Japan's stock and bond markets are closed Monday, meaning U.S. Treasury yields may see a delayed response to the election later in the week. Higher Japanese yields could make U.S. debt less attractive to local investors, who have typically been big Treasury buyers. Gold edged up 0.15% to $3,363.20 per ounce. U.S. oil prices rose 0.19% to $67.47 per barrel, and Brent crude climbed 0.12% to $69.36. After big banks and Netflix reported quarterly earnings last week, more tech giants are due. Results for Tesla and Google parent Alphabet come out on Wednesday, while Intel reports on Thursday. Other big names on deck include Verizon, Coca-Cola, Lockheed Martin, General Motors, RTX, Northrop Grumman, IBM, AT&T, Honeywell, and Union Pacific. Among economic reports that are scheduled are two key housing datasets: existing home sales on Wednesday and new home sales on Thursday. They come amid growing signs of cracks in the housing market. On Tuesday, Federal Reserve Chairman Jerome Powell and Governor Michelle Bowman are due to speak at a banking conference. That's as President Donald Trump and the White House have continued to wage a pressure campaign against Powell over rates and renovations at the central bank's headquarters. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Dow futures dip as investors brace for a big week of earnings, housing market data and Jerome Powell
Markets were little changed on Sunday ahead of a busy week for investors, who can expect another flood of corporate earnings, economic data and comments from central bankers. Meanwhile, upper-house parliamentary election results from Japan could ripple through global bond markets and jolt U.S. Treasury yields. U.S. stocks signaled a calmness on Sunday night that belied a busy week ahead that includes a flood of corporate earnings, economic data and comments from central bankers. Futures tied to the Dow Jones Industrial Average dropped just 16 points, or 0.04%. S&P 500 futures were down 0.03%, and Nasdaq futures dipped 0.04%. The yield on the 10-year Treasury edged down 1.1 basis points to 4.42%. The U.S. dollar was flat against the euro and down 0.15% against the yen, after upper-house parliamentary elections in Japan delivered a disastrous blow to Prime Minister Shigeru Ishiba's coalition. Earlier forecasts for a poor result for Ishiba had already sent Japanese government bond yields to multi-year highs as investors expected the election to clear the way for more government spending and tax cuts. Japan's stock and bond markets are closed Monday, meaning U.S. Treasury yields may see a delayed response to the election later in the week. Higher Japanese yields could make U.S. debt less attractive to local investors, who have typically been big Treasury buyers. Gold was down 0.14% at $3,353.60 per ounce. U.S. oil prices rose 0.21% to $67.48 per barrel, and Brent crude climbed 0.19% to $69.41. After big banks and Netflix reported quarterly earnings last week, more tech giants are due. Results for Tesla and Google parent Alphabet come out on Wednesday, while Intel reports on Thursday. Other big names on deck include Verizon, Coca-Cola, Lockheed Martin, General Motors, RTX, Northrop Grumman, IBM, AT&T, Honeywell, and Union Pacific. Among economic reports that are scheduled are two key housing datasets: existing home sales on Wednesday and new home sales on Thursday. They come amid growing signs of cracks in the housing market. On Tuesday, Federal Reserve Chairman Jerome Powell and Governor Michelle Bowman are due to speak at a banking conference. That's as President Donald Trump and the White House have continued to wage a pressure campaign against Powell over rates and renovations at the central bank's headquarters. This story was originally featured on Sign in to access your portfolio
