Svmuu News: Thomas Mathews, Head of Asia-Pacific Markets at Capital Economics, stated in a report that the rally in U.S. Treasuries—which had previously driven yields lower—is expected to lose momentum, while German government bonds may rise further.
He noted that U.S. Treasuries face some key tests this week. He pointed out that one of the Federal Reserve’s key reasons for cutting interest rates is to protect the health of the labor market.“But labor market momentum has strengthened recently, and we expect the U.S. June jobs report, due later this week, to be strong once again,” Mathews said, adding that it is becoming increasingly clear that labor market conditions will not serve as a reason to delay monetary tightening. “This may be the biggest risk facing U.S. Treasuries in the near term, but it is not the only one.”(Jin Shi)