Fed, bond and rates
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Treasury securities trends are often a strong indicator of how investors think the Fed will steer the economy. And by that measure, the markets are expecting falling interest rates and decent growth.
Equities are typically the driving force for structured products. But rising rates have given a turbo boost to fixed income structured products.
Yields on Japanese 10-year government bonds on Thursday rose to their highest level since 2007, driven by expectations that the Bank of Japan will raise interest rates later this month. Longer duration JGB yields also scaled new peaks,
The Bank of Japan plans to ramp up government bond buying if long-term interest rates rise sharply, Governor Kazuo Ueda said on Tuesday, noting that the recent rate rises had been "somewhat rapid".
China’s government bond yields are likely to fall back toward a record low next year as an uneven economic recovery puts pressure on the central bank to cut interest rates, according to HSBC Asset Management.
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