US100 index is erasing recent gains and is currently trading more than 2% lower. One of the reasons may be rising government bond yields, as investors increasingly believe that the Federal Reserve will tighten faster the monetary policy to fight surging inflation and address the tightening labor market in spite of the surge in Covid-19 omicron variant infections. Around 58% of traders are betting that the Fed will start hiking rates already during the March meeting, up from around 27% just one month ago, according to federal-funds futures data. The 10-year Treasury yields strengthened to a 6-week high of 1.67% while the 5-year yield hit 1.392%, the highest since February 2020. Also, the 30-year yield reached 2.06%, the highest since October 26th. The market currently expects the FED to raise rates in March. Today's reading of the ISM manufacturing index may also weigh on market sentiment.
US 10-year treasury bonds yield rose sharply in recent days. Source: Bloomberg
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
US100 index on the D1 interval is currently struggling to stay above the support marked with 23.6% Fibonacci retracement of the last upward wave. Should a break lower occur, downward move may accelerate towards EMA 50 (blue line). Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
