NEWSLETTER
By Chibuike Oguh and Nell Mackenzie
NEW YORK/LONDON (Reuters) – U.S. Treasury yields retreated from an eight-month high on Thursday, while the dollar strengthened against major currencies, as markets weighed interest rate cuts. of the Federal Reserve amid the economic resilience of the United States.
The benchmark index fell 0.45 basis points to 4.689%. It hit a high of 4.73% on Wednesday, the highest since April 2024.
On Friday, the closely watched monthly US payrolls report will provide clues about the Federal Reserve's policy outlook. Markets are fully pricing in only a 25 basis point rate cut in the US in 2025.
“Yields are down a little bit heading into Friday's payrolls number and it's indicative of where the level of concern is, which is that maybe the move in yields has been overstated,” said Drew Matus, chief market strategist. from MetLife (NYSE). 
Investment Management in New Jersey.
Minutes from the Federal Reserve's December policy meeting released Wednesday showed officials were concerned that tariffs and immigration policies proposed by President-elect Donald Trump could prolong the fight against inflation.
A selloff in the Treasury market continued Wednesday after CNN reported that Trump was considering declaring a national economic emergency to provide legal justification for a series of universal taxes on allies and adversaries.
US stock markets were closed on Thursday for the funeral of former US President Jimmy Carter. US bond markets close early at 2 pm ET (1900 GMT).
“I put the fair value of the 10-year yield at 4.50% and yet we are still at 4.66% heading into a report that will show continued strength in the labor market, in which case rate cuts will not are the right thing to do.” we are doing, or we will show labor weakness and ratify the Federal Reserve's vision of the world in a context of inflation that remains high and a high degree of uncertainty in policies and economic results,” Matus said.
European stocks finished higher after paring early losses, helped by gains in healthcare and basic materials stocks, which were offset by declines in retailers. The pan-European closed with an increase of 0.42%.
It traded near 109.54, its highest level since November 2022, which it reached last week. The , which measures the dollar against a basket of currencies that includes the yen and euro, rose 0.14% to 109.17, and the euro fell 0.18% to $1.0299.
The pound was heading for its biggest three-day fall in almost two years, under pressure from a global bond sell-off that has hit government bonds especially hard, pushing yields to 16-and-a-half-year highs, as yields rise. concern about British finances.
Sterling was last down 0.48% at $1.2303, having hit its lowest level since November 2023 earlier in the day.
stabilized near a 16-month low against the dollar as the country's central bank announced a record amount of banknote sales to support the currency.
Oil prices rose more than 1% as cold weather gripped parts of the United States and Europe, increasing winter fuel demand.
Futures rose 1.29% to $77.14 a barrel. US West Texas Intermediate crude oil futures gained 1.15% to $74.16.
Gold prices advanced. rose 0.31% to $2,670.09 an ounce. The United States rose 0.62% to $2,681.00 an ounce.
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