The Daily Update - Trump Fed BoJ UST

With bond markets calming down this week after the rise in yields brought on by the Trump victory, the focus will be on Fed chair Janet Yellen’s congressional testimony this evening. The market will be eagerly awaiting the chair’s thoughts post the Trump victory as to the impact on monetary policy over the coming year or so. The futures market has already priced in a rise in the funds rate at the 13-14 December meeting at around 94% and so little new information is expected about the near term but of major importance will be any information Yellen gives as to the likely pace of further rises during 2017.

Wealthy Nations Daily Update - FED

Twas the ninth night before Christmas, when all through the bourses,

Not a creature was stirring, not even the bears,

The stockings were hung by the chimney without care, (following the Christmas party’s)

In the hopes that Janet Yellen and the Fed would be there.

It could go down as the most dovish rate hike in history! Last night the Fed raised rates by the expected 25 basis points. Fed chair, Janet Yellen then went on to mention twice in the statement after the announcement that future hikes would be gradual and depended on actual and expected progress towards their inflation goal. So watching the data, ring any bells?? The markets will now get back to watching incoming data to shape forecasts and stop spending millions of man hours talking about it!!

Wealthy Nations Daily Update - US Treasuries

The fears and warnings, even mentioned in the house, regarding the dire situation that will befall interest rate markets when China starts to sell US Treasuries appears to be a non-event. Recent numbers show that China Inc. has so far this year reduced their Treasury holdings by around $200 billion, the first time they have reduced exposure since 2001, with very little impact on market rates.

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