(News Bulletin 247) – The US equity markets are all on the rise on Tuesday morning, favored by a sharp decline in yields on US debt.
About two hours after opening, the Dow Jones advanced nearly 0.5% to 34,718 points, while the Nasdaq Composite gained more than 1.5% to 13,914.3 points.
Buyers are encouraged by the downward movement in sovereign rates that had been emerging for several days and which was confirmed this morning with economic statistics below expectations.
US consumer confidence deteriorated more than expected in August, to 106.1 from 114 in July, showed the results of the Conference Board’s monthly survey released on Tuesday.
More worryingly, the index measuring the judgment of consumers on their expectations fell to 80.2, against 88 last month, a level generally heralding a recession.
Following these figures which plead for a moderation of the monetary policy of the Fed, the yield of Treasuries to ten years falls towards 4.13% today, very far from the peak of more than 15 years at 4.36% which had reached last week.
European bonds are also in demand, which allowed the yield on the 10-year German Bund, the benchmark for the euro zone, to drop five basis points to 2.51%.
The fall in the dollar that accompanies the decline in bond yields also indirectly results in a rise in commodity prices.
The price of a barrel of Texas light crude (WTI), which was moving at 78.5 dollars, rebounded 0.5% to 80.5 dollars.
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