The benchmark 10-year U.S. Treasury yield reached a 3-month low today at 4.249% and is currently down 62 basis-points during November. October’s high at 4.992% (a 16-year record) combined with November’s steep decline looks like the beginning formation of a technical reversal. The 20- and 30-year yields have seen similar declines near 60 basis-points. The U.S. Treasury yield curve has flattened significantly during November with yields lower in all tenors.
Fed Funds Futures continue to imply an increasing probability of cuts in the Fed’s overnight rate beginning next year. The chance of a 25-basis point cut at the FOMC’s March meeting is 45% and increases to 75% by September.
The USD is higher today vs. most G10 currencies following the release of 3rd quarter GDP at 5.2%, above the 5.0% estimate. Primary dollar gains vs. the majors hint at a shift to ‘risk off’: +0.55% vs. BRL, +0.48% vs. AUD, +0.44% vs. SEK, +0.43% vs. NOK, and +0.35% vs. MXN.
Gold is -0.08% today after reaching a fresh 6-month high at $2,051.89/oz. earlier in the trading session. Gold’s Oct-Nov gain of 10.33% rivals equity gains over the same time span, i.e. SP500 Index is +6.22%.
Third quarter Personal Consumption reported today was 3.6%, below the 4.0% forecast.
