At the time of the review, the interest rate on the US ten-year government bond was 3.8 percentage points higher at 4.052 percent. The interest rate on the two-year government bond was 1.0 percentage point higher at 3.500 percent.
In Germany, the interest rate on the ten-year government bond was 5.0 percentage points higher at 2.736 percent, and the interest rate on the two-year government bond was 2.2 percentage points higher at 2.046 percent.
The US central bank, the Fed, is expected to lower interest rates at its December meeting.
CNBCaccording to the market expectations, there is currently a 0.25 percentage point decrease with a probability of almost 88 percent. Expectations regarding the interest rate cut have risen, as a little over a week ago the interest rate cut was only expected with a probability of about 40 percent. The background is, among other things, Fed officials’ comments interpreted as dovish.
The market is also considering the president Donald Trump’s announcement that the selection of the new Fed chief has been made. However, Trump has not yet said who he has chosen. The current CEO Jerome Powell the season ends in May. Trump has generally been unhappy with Powell’s leadership and has repeatedly criticized him publicly.
Investing.comin according to the pre-favorite for CEO is Kevin Hassett. Other candidates include, for example Christopher Waller and Kevin Warsh. In any case, Trump is expected to choose someone close to him who can significantly change the Fed’s operation and direction.
The Fed is currently in a quiet period ahead of next week’s interest rate meeting. Powell plans to give a speech later on Monday, but due to the quiet season, nothing very significant is hardly known.
In the foreign exchange market, the Japanese yen strengthened. In Japan, the central bank signaled that raising interest rates could be possible at the next interest rate meeting. The message was reflected in both the strengthening of the yen and the rise in interest rates on government bonds.
At 3:29 p.m., one euro was worth 1.16 dollars, 180.20 yen, 0.88 pounds and 10.96 Swedish kronor. The dollar was 154.76 yen and the pound was 1.32 dollars.
On the basis of futures, Wall Street is expected to open downward. At the time of review, the Dow Jones index future was down 0.4 percent, the S&P 500 future was down 0.6 percent, and the Nasdaq future was down 0.9 percent.