US output plunges on fears virus variant hampers growth


NEW YORK – US Treasury yields

fell to a five-month low on Monday as a rapid rise in

New coronavirus cases raise fears global growth will slow and

hinder the reopening of economies.

Average number of new US COVID-19 cases per day

tripled in the last 30 days, according to Reuters analysis tích

data. In the month from June 18 to Sunday, it increases from

12,004 to 32,136.

New cases, hospitalizations and deaths due to diabetes

Variations have increased in recent weeks but the market



overall only reacted on Monday.

“This looks like a global flight to the quality/risk event”

Scott Buchta, Head of Fixed Income Strategy at Brean

The capital is in Chicago.

“Downward movement speed almost reflects

the rate at which output grew higher in February and March – also

far, too fast,” he said in the e-mail.

Yields on benchmark 10-year notes fell 12.2

basis points to 1.177 percent, close to the session low of 1.176 percent, a

levels were last seen in February.

Yields on 30-year Treasury notes fell 11.8

basis point is 1.812% as stock markets around the world fall while

The safe-haven dollar and Swiss franc rose during the flight to safety.

The underlying dynamics of the bond market in relation to yields

Stan Shipley, macro research says



analyst at Evercore ISI in New York.

“But the wild card we had to deal with for the last time

year and a half was coronavirus and now variant,” he

to speak. “Unfortunately, most of the data on variation is deteriorating,

so everyone is scrambling for safety until they can find out

What is happening. “

The Delta variant’s spread has raised risk aversion,

push US and European bond yields lower and cause stockpiles

facing their longest losing streak since the pandemic first hit

global market 18 months ago.

Fed Funds Futures, a widely used security for hedging

short-term interest rate risk, shows Federal opportunity

Reserve hiking rate in December 2022 drops to 58% from 90% in

July 13, when the US consumer price index is released.



The possibility of the Fed raising rates in January 2023 has decreased

up 70% from 100% last Tuesday, while the futures contract is now full

prices spiked in March 2023.

Japanese stocks fell for the fourth consecutive session as

variant hits the psychology, Britain’s “free day” ends COVID-19

door lock was broken due to increased infections and Australia

Officials say Victoria will extend closures to slow down

spread of variation.

“That is the mentality that is driving the exchange rate market today

– expect that maybe we’ll come back after a while

all the progress we have made,” Gennadiy Goldberg, care quan

rate strategist at TD Securities in New York.

A closely watched portion of the US Treasury yield curve

measures the difference between yields on 2-year and 10-year Treasury bonds



notes, considered an indicator of the economy

expected, at 96.8 basis points.

Two-year U.S. Treasury yield, usually

move step by step with interest rate expectations, fell 1.9

basis point at 0.208%.

Breakeven rate on 5-year US Treasuries

Last Inflation Protected Securities (TIPS)

2.448 percent.

The 10-year TIPS breakeven rate is the last in

2.257%, indicating that the market sees an average inflation of just

less than 2.3% a year over the next decade.

US Treasury will auction $24 billion of 20-year bonds

on Wednesday and $16 billion of the 10-year TIPS on Thursday.

July 19 Monday 3:03 PM New York/1903 GMT

Net current price

% Profit change


Three-month bill 0.045 0.0456 0.000

Six-month bill 0.0475 0.0482 -0.003



Two-year bond 99-215/256 0.2075 -0.019

3-year tenor 100 0.375 -0.055

5 year bond 100-234 / 256 0.6867 -0.091

7-year bond 101-240 / 256 0.9609 -0,110

10-year bond 104-36 / 256 1.1772 -0.1122

20-year bond 108-168 / 256 1.7321 -0.124

30-year bond 112-236 / 256 1.8121 -0.118


Net (bps) last



US Dollar Swap for 2 years 7.00 -0.75


US Dollar Swap for 3 years 8.25 -1.75


US Dollar Swap 5 year term 6.00 -1.75


US Dollar Swap 10 years -2.75 -1.50


US Dollar Swap 30-year term -31.50 -1.50


(Reporting by Herbert Lash; Additional reporting by Karen

Brettell, Gertrude Chavez-Dreyfuss of New York and Karen Pierog

in Chicago; Edited by Kirsten Donovan, Dan Grebler and Andrea



An in-depth report on the innovation economy from The Logic, in partnership with the Financial Post, brought to you.


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