BoJ raises rate to 1.25%; RBA flags inflation risks
BoJ hikes rate to 1.25% as expected; RBA warns of inflation risks. Iran attacks tanker, US sanctions crypto exchange.
The US 10-year Treasury yield reached 5% for the first time since 2023, driven by rising oil prices and supply concerns.
Some had expected 10-year buyers to hold off until after the FOMC. Despite a couple of strong auctions last week, the market was driven by a $4 rise in oil prices and discussions about longer shutdowns on the Saudi east-west pipeline.
While 5% is a notable level, 5.02% is equally significant because surpassing it would bring yields back to levels seen during the financial crisis.
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BoJ hikes rate to 1.25% as expected; RBA warns of inflation risks. Iran attacks tanker, US sanctions crypto exchange.
The Bank of Japan raised its policy rate by 25bp to about 1.25% in a 7-2 vote, signaling further rate hikes ahead but with board dissent.
iCapital raised its 10-year yield forecast to 4.5%-5.3%. A strategist said oil prices, not the Fed dot plot, will decide the outcome.
UBS sees two more RBA hikes to a 4.85% terminal rate after Bullock and Hauser hawkish comments, with markets pricing a 70-75% chance of a September move.