FXStreet (Mumbai) – The two-year yield in the US, which mimics rate hike expectations, fell sharply after the official data in the US showed a sharp slowdown in the wage growth in the second quarter.
The 2-year yield now trades 6.7 basis points lower at 0.665%. The yield had clocked a high of 0.751% earlier today. The rate hike bets had strengthened after the FOMC statement sounded upbeat on Wednesday and the US data confirmed the economy rebounded in Q2.
However, the weak wages figure seems to have raised concerns that labor market strength is unable to translate into higher pay. Consequently, the rate hike bets took a hit, which is evident from the drop in the 2-year yield. The fall in the yields may also be due to month end portfolio adjustments.
At the long end, the 10-year yield now trades at 2.203%; down 6.5 basis points and the 30-year yield trades 3.9 basis points at 2.914%.
(Market News Provided by FXstreet)