Fixed Income Update 01 Aug 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 1 August 2024
The Dovish Tone Appears, but Geopolitical Risks are Rising
The data releases that influenced yield movements in the week of 25 Jul – 31 Jul ‘24 are as follows:
• The number of people claiming unemployment benefits in the US decreased by 10K on the period ending Jul 20th.
• The US core PCE price index in Jun ‘24 rose by 0.2% MoM.
• The PCE price index in the US for Jun ‘24 edged up 0.1% MoM.
• The number of job openings in Jun ‘24 was little changed at 8.184 mn.
The dovish tone expressed by Jerome Powell during last night's FOMC meeting opens up the possibility of a 25 bps Fed Rate cut in the upcoming September FOMC meeting. Furthermore, the DXY decreased by -0.29% during the past week. At the same time, reducing recession risk is evident with the widening yield spread between UST30Y and UST5Y, and the decreasing inversion between UST10Y and UST2Y yields.
Regards,
Fikri C Permana - KBVS Research