Bond, FX Traders Back at Square One in Volatile Open to 2017
- There’s been a lot of noise on the path to little changed
- BMO Sees ‘meaningful test’ of overseas demand in Treasury sale
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If bond and currency traders didn’t have a post-New Year’s Eve hangover, they might just have a splitting headache now.
This is supposedly the year of reflation and three Federal Reserve interest-rate hikes -- a notion bolstered by the FOMC minutes release on Wednesday. And yet, U.S. Treasury yields fell the next day by the most since after the Brexit vote, and the dollar’s rally came to a screeching halt. Then the move almost entirely reversed on Friday after a jobs report that, while missing expectations on the headline number, was viewed as solid enough to keep the Fed’s plans intact.