What’s going on here?
Indian bond yields jumped this Monday as robust US jobs data propelled American bond yields upward – shaking off any wishful thinking about the Federal Reserve cutting rates anytime soon.
What does this mean?
The latest US labor report showed a surprising gain of 254,000 jobs in September, while the unemployment rate ticked down to 4.1%. This stronger-than-expected economic performance dashed hopes for a 50-basis-point rate cut by the Federal Reserve in November, leaving markets to bet heavily – with 90% odds – on a smaller 25 bps cut instead. Observers like PGIM India Mutual Fund’s fixed income head suspect that US bond yields might remain high unless significant economic downside emerges. In response, traders in India are closely watching incoming inflation figures to gauge future trends.
Why should I care?
For markets: Rate cut hopes hitting roadblocks.
The Reserve Bank of India is widely expected to keep Read more…
