FirstFT: 10-Year U.S. Treasury Yield Reaches 3%
The yield on the 10-year U.S. Treasury hit 3% for the first time in more than three years on Monday, as traders braced for the Federal Reserve to raise interest rates again to combat the surge. inflation and slowing growth.
Government bond yields have a profound impact on the economy, fueling mortgage rates and corporate borrowing costs. The higher yield, which rises when bond prices fall, is tightening financial conditions after two years of the coronavirus pandemic.
The US 10-year yield edged above 3% in early afternoon New York, according to Bloomberg data – double its level at the start of the year and the highest since December 2018. It is then fell back to 2.99%, up 0.05 percentage points on the day.
Yields have risen this year as the Fed takes steps to try to stem inflation, which hit 8.5% on an annual basis in March – its fastest rate of increase in 40 years. The combination of high inflation and a weakening economic outlook – the US economy shrank 1.4% in the first quarter – raised questions about the Fed’s ability to raise interest rates without overburdening the economy.
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The news of the war in Ukraine
Military aid: The UK is to pledge £300million in military aid to Ukraine as Boris Johnson prepares to become the first Western leader to address the country’s parliament today since the Russian invasion.
Regional voltages: Concern is mounting in the breakaway region of Transnistria that Moldova could be drawn into the war in neighboring Ukraine.
Energy: Germany has warned European consumers to prepare for higher energy prices as it said it was ready to bear the economic costs of a Russian oil embargo.
Russian Opposition: Russian tycoon Oleg Tinkov has claimed he was forced into hiding and selling his stake in the bank he founded after criticizing the war.
Debt: Russia could default again this week – though it may be short-lived, writes Robin Wigglesworth in Alphaville.
Five other stories in the news
1. BoE set to raise interest rates further The Bank of England is expected to raise interest rates by 0.25 percentage points on Thursday to their highest level since 2009, as the central bank seeks to strike a balance between tackling record inflation and avoiding worsening an economic downturn in the UK.
2. Austria says EU must consider radical options on Ukraine The EU must consider a drastic treaty change if it is serious about joining Ukraine and protecting it from Russian domination, Austrian Foreign Minister Alexander Schallenberg told the Financial Times, adding that Moscow’s war of aggression was a “geostrategic moment” for Europe.
3. Johnson joins bid to win Arm list for London Boris Johnson has joined in a last-ditch push to convince British chip designer Arm to list in London, as government officials worry about lasting damage if the country’s best-known tech company chooses New York for its Initial Public Offering.
4. Brussels accuses Apple of abuse of market power EU regulators have accused Apple of breaching competition law by abusing its dominant position in mobile payments to limit rivals’ access to ‘tap and go’ contactless technology to benefit its own Apple Pay system.
Opinion: The EU kicked off the fightback against Big Tech, writes Shoshana Zuboff, professor emeritus at Harvard Business School.
5. Britain’s ditches plan to give teeth to tech regulator Britain is set to suspend plans to empower a new tech regulator, in a blow to global efforts to curb the dominance of internet companies. The government is not supposed to provide a statutory basis for the digital markets unit within the Competition and Markets Authority.
The day ahead
Modi summit in Europe India’s Prime Minister arrives in Copenhagen for the second India-North Summit, which will focus on economic recovery, climate change and technology. Narendra Modi has also been invited by German Chancellor Olaf Scholz to attend the G7 leaders’ summit next month.
Economic data EU March Employment, Industrial Producer Prices and Retail Sales are released today, while Germany releases April Employment and the S&P Global Purchasing Managers Index Manufacturers for UK is out.
Company results BNP Paribas, BP, Deutsche Post, DHL, Lyft, Pfizer, Prudential Financial, Starbucks, Telenor Thomson Reuters and Viacom CBS are among the companies reporting their first quarter results.
Events The three days Summit of European Associations — an annual training and networking forum for international associations — begins in Brussels.
The Fed Federal Open Market Committee officials will meet in Washington for a two-day policy meeting.
What else we read
FT Ranking: Africa’s fastest growing companies 2022 FT’s inaugural ranking of Africa’s fastest growing companies provides insight into the business landscape on a continent where technology, fintech and support services companies have had to adapt to a radically changed environment.
Famine: In the Horn of Africa, which stretches from northern Kenya to Somalia and swaths of Ethiopia, up to 20 million people could go hungry this year.
Would a Sinn Féin victory open the door to a united Ireland? Almost a quarter of a century after the 1998 Good Friday Agreement ended The Troubles – three decades of violence in which more than 3,500 people died – polls predict that Sinn Féin, inextricably linked to the The IRA will become Northern Ireland’s largest party after Thursday’s election for the first time.
Musk’s Twitter deal rewards risk-taking at Morgan Stanley When Twitter’s board agreed to sell the social media company to Elon Musk, a Wall Street bank was at the center of the deal: Morgan Stanley, whose role in the $44 billion bid crowns a years-long effort to cultivate ties with the richest person in the world. .
Deconstructing “dogfooding” Executives testing a company’s product or service have been dubbed “dogfooding”: Airbnb co-founder Brian Chesky plans to stay at company properties every few weeks; John Zimmer, boss of Lyft, makes a change of behavior on New Year’s Eve. Such practices are spreading even beyond the technology sector.
The rot is taking hold in the depths of the job market At least 500,000 people in the UK work through ‘umbrella companies’, middlemen who employ people on behalf of clients or agencies. While many umbrellas fully comply with tax and employment rules, the government has identified scams that suck money out of the pockets of workers and taxpayers.
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Floating 800km west of Senegal, Santo Antão is Africa’s westernmost outpost and remains one of the least visited of Cape Verde’s nine inhabited islands. There is no airport and only two main roads. The mountainous island is a hiker’s paradise.