In a notable turn of events, US Treasury yields experienced a decline after midday Thursday, coinciding with a substantial increase in crude oil futures and a depreciation of the dollar against the Japanese yen. The major US exchanges, which include the New York Stock Exchange and Nasdaq 100, fully suspended equity and options markets in observance of a National Day of Mourning dedicated to the late former US President Jimmy Carter.
This decision was confirmed by an update from IG markets. Meanwhile, the bond market operated on a shortened schedule, closing early at 2 pm ET, while forex trading remained unaffected alongside the regular trading schedules for US metals and energy commodities. The US 10-year Treasury yield saw a drop of 1.6 basis points, settling at 4.68%.
This reduction marks a retreat from its peak levels observed earlier this week, which were the highest since late April. Similarly, the two-year Treasury yield decreased by 2.5 basis points, reaching 4.27%. On the commodities front, West Texas Intermediate crude oil futures advanced by 1.1%, with prices climbing to $74.14 a barrel.
This surge takes place alongside a 0.2% drop in the dollar against the Japanese yen, which hit 158.04. Recent statements by Patrick Harker, President of the Philadelphia Fed, and Susan Collins, President of the Boston Fed, have reiterated that the central bank is on track to potentially cut interest rates in the near future.
This comes in the wake of the December meeting minutes from the Federal Open Market Committee, which revealed concerns regarding potential inflation impacts arising from President-Elect Donald Trump’s proposed policies. The minutes underscore the necessity for caution in easing monetary policy, as noted in a report by D.A.
Davidson. In related economic news, the Philadelphia Federal Reserve's revised manufacturing index for December improved slightly to minus 10.9, up from a prior revision of minus 16.4, following a revised figure of minus 4.4 in November. The January manufacturing index from the Philadelphia Fed is scheduled for release on January 16. In terms of job market conditions, outplacement firm Challenger, Gray & Christmas reported that companies have signaled plans to cut 38,792 jobs in December.
This figure marks a decrease from the 57,727 jobs that were slated for cuts in November but represents an increase from the 34,817 job cuts during the same month last year. On the corporate landscape, discussions between the Dutch government and Nvidia (NVDA) and Advanced Micro Devices (AMD) are underway regarding the establishment of an artificial intelligence facility in the Netherlands.
Additionally, Super Micro Computer (SMCI) has commenced the volume shipment of new high-performance servers that are equipped with Intel’s (INTC) Xeon 6900 series processors. This development occurs as the Biden administration plans to impose another round of restrictions on the export of artificial intelligence chips, as reported by Bloomberg, citing sources familiar with the matter. In commodities trading, gold futures experienced a rise of 0.7%, reaching $2,692 an ounce, while silver futures surged by 1.3%, trading at $31.11 per ounce..