Asian Bonds Weaken as U.S. Yields Rise, Gold Slips Below $4,400
Asia-Pacific bond markets weakened on Tuesday, following pressure from U.S. Treasuries. Rising U.S. yields became a key focus for investors ahead of this week’s inflation data.
The U.S. 10-year Treasury yield rose by around 6 basis points to 4.71%, putting additional pressure on bonds in Australia and New Zealand. Investors are once again pricing in persistent inflation risks and the possibility that the Federal Reserve may keep interest rates higher for longer.
Higher Treasury yields also weighed on gold prices. After briefly trading above $4,400 an ounce, bullion slipped back below that level as rising bond yields reduced the appeal of non-yielding assets.
The move in yields came alongside a four-day rally in oil prices. Brent remained close to $88 a barrel as renewed U.S.-Iran tensions continued to cloud the outlook for reopening the Strait of Hormuz, reviving concerns about energy-driven inflation.
Markets are now turning their attention to the upcoming U.S. CPI report, which could provide fresh guidance on the Fed’s policy outlook. A stronger-than-expected inflation reading could keep Treasury yields elevated and put further pressure on gold.
Newsmaker Analysis: As long as the U.S. 10-year Treasury yield remains high, gold may struggle to hold above $4,400. A hotter CPI print could push yields and the dollar higher and deepen gold’s correction, while softer inflation could pull yields lower and open the door for bullion to retest the $4,400 level.(mrv)
Source : Newsmaker.id
