KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
U.S. Treasury yields sank on Thursday, with the 10-year note closing at 3.976%, its lowest level of 2025, marking a significant break below the psychologically important 4% line. This is only the second time yields have fallen below that threshold this year—the last being in April, following President Trump’s tariff announcement.
Yields Drop as Economic Weakness Emerges
The decline in yields comes as investors increasingly seek safety amid weak U.S. economic data, rising banking concerns, and renewed U.S.–China trade tensions.
New York Fed data showed a sharp contraction in services activity across New York, New Jersey, and Connecticut.
Philadelphia Fed manufacturing activity dropped to a six-month low.
“These are not big hitters, but they point to macro weakness,” said Padhraic Garvey, head of research for the Americas at ING.
Market Dynamics: Fed Cuts, Inflation, and Shutdown Effects
The move lower in yields reflects growing expectations of further Federal Reserve rate cuts, after Chair Jerome Powell reaffirmed this week that easing is on track.
Lower yields boost bond prices and typically reduce mortgage rates, signaling investor expectations of a slowing economy and cooling inflation.
Adding to the uncertainty, the U.S. government shutdown, now in its 16th day, has paused key economic data releases—leaving traders reliant on inflation swaps and gas prices for guidance.
Gasoline prices have dropped 4% over the past month, suggesting softer inflation.
Inflation swaps show expectations trending lower, echoing the fall in yields since late August, according to Bear Traps Research.
Flight to Safety Accelerates
The flight to Treasuries has been mirrored by a surge in gold prices, record-high since early October, and warnings from global institutions like the IMF about softening in the U.S. economy.
The decline in yields across maturities is broad-based:
10-year Treasury: –0.53%, to 3.976%
1-year Treasury bill: –0.36%
30-year Treasury bond: –0.43%
Looking Ahead
Analysts now question whether this dip below 4% is temporary or signals a sustained move lower.
Markets await the September Consumer Price Index (CPI) data—expected on October 24—for clearer direction.
Until then, traders are bracing for volatility as weaker macro indicators, tariff-related uncertainty, and falling inflation expectations continue to define sentiment in the bond market.
Comments
Post a Comment