With the lack of first-tier economic data, the selloff in higher-yield (junk) corporate bonds, mainly driven by energy-related companies, roiled sentiment and raised concerns over US economic recovery. However, this should not prevent the Fed from hiking the policy rate by +25 bps this week. Indeed, CME’s 30-day Fed funds futures have priced in an 83.3% chance of such a rate hike, up from 79.5% in the previous day.
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Gloomy Prospect for Oil Prices Weighed on Bonds
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