Treasury yields are slackening; Turkish lira plunges

A Wall Street sign is visible in the financial district of New York, United States on November 8, 2021. REUTERS / Brendan McDermid

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  • US equities mixed at the start of the session
  • Falling dollar
  • Turkish lira plunges into rate cut

NEW YORK, Nov. 18 (Reuters) – U.S. Treasury yields edged down on Thursday as the market struggled with reduced liquidity, while the Turkish lira weakened further after its central bank rate cut.

MSCI’s stock gauge across the world was flat and Wall Street stocks were mixed.

Cisco Systems (CSCO.O) fell nearly 9% per day after forecasting lower than expected current quarter revenue due to supply chain shortages and delays. It was the latest in a growing list of U.S. companies citing supply chain issues. Read more

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Investors are concerned about further increases in price pressures, as well as the uncertainty surrounding the Federal Reserve’s tightening plans.

Consumer discretionary stocks (.SPLRCD), however, rose 1%. It came a day after retail giant Target (TGT.N) warned that high inflation in the United States was putting pressure on profit margins.

The Dow Jones Industrial Average (.DJI) fell 94.72 points, or 0.26%, to 35,836.33, the S&P 500 (.SPX) gained 10.97 points, or 0.23%, to 4,699.64 and the Nasdaq Composite (.IXIC) added 64.71 points, or 0.41%, to 15,986.28.

The Pan-European STOXX 600 Index (.STOXX) lost 0.48% and the MSCI Global Equity Index (.MIWD00000PUS) lost 0.01%.

Previously, the German and French stock markets had reached record highs despite sharp declines in energy stocks.

The benchmark 10-year US Treasury yields were 1.58%. They jumped from a low of 1.415% last week and remain below the five-month highs of 1.705% reached on October 21.

Bond movements can remain volatile, however, as the market faces reduced liquidity which is likely to worsen during the holiday season.

“There has been a pretty noticeable drop in market liquidity, which I think has contributed to some of the outsized moves,” said Jonathan Cohn, head of rate trading strategy at Credit Suisse in New York.

“The fact that we have already experienced a decrease in liquidity suggests that this wobble that we have seen may persist.”

In the foreign exchange market, the dollar index fell 0.1%, with the euro up 0.33% to $ 1.1356.

The Turkish lira lost another 3.3% to more than 11 per dollar after the central bank cut rates by 100 basis points to 15%, even in the face of inflation close to 20% and the fall in the Turkish currency to the south.

The pound has lost about 11.5% of its value this month amid renewed criticism from President Tayyip Erdogan of interest rates and calls for stimulus despite the risks. It was at 10.955 for the last time, after hitting a record low of 11.30 to the dollar. Read more

US crude recently rose 0.23% to $ 78.54 a barrel and Brent was at $ 80.77, up 0.61% on the day.

Spot gold fell 0.3% to $ 1,861.68 an ounce.

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Additional reporting by Tom Westbrook in Sydney and Marc Jones and Sujata Rao in London; Karen Brettell and John McCrank in New York; edited by Shri Navaratnam, Sam Holmes, Philippa Fletcher and Dan Grebler

Our Standards: Thomson Reuters Trust Principles.

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