Reply To: Central Bank Watch – Central Bank Collusion in Rate Hike Extravaganza


U.S. Treasuries climbed on Thursday with longer tenors finishing ahead despite showing some relative weakness in the early going of the session.

The Hong Kong Monetary Authority followed yesterday’s FOMC rate hike in customary fashion with a 50 bp increase of its own while the Bank of England, Swiss National Bank, and European Central Bank also raised their respective rates by 50 bps. Norges Bank also raised its policy rate, but only by 25 bps.

Altogether, these rate increases served as a reminder of the building headwinds to global growth, which gave a boost to Treasuries and pressured stocks, sending the S&P 500 to a level not seen in five weeks with its 50-day moving average (3861.73) looming below.

Treasuries added to their opening gains during the first few minutes of action but found resistance once longer tenors approached their morning highs from Tuesday. Mid-morning trade saw some light backtracking, but the market bounced near today’s starting levels with longer tenors rising to fresh highs in the early afternoon as stocks continued sliding.

The late push briefly pressured the 30-yr yield past its low from Tuesday, but the advance was moderated during the final hour of trade.