China and US interest rates continue higher

Large consumer (5.1%) and producer price (6.1%) gains in China was not immediately met with an interest rate hike from the PBOC, at least not yet, and the lack of one sent the Shanghai index up almost 3% and the rest of Asian markets followed. That strength spilled over into Europe and has the S&P futures also higher. Copper prices are rising to fresh record highs. The consequence though of all of the above is another rise in interest rates where the US 10 yr yield is at another fresh 6 month high. Tomorrow, the FOMC gets together for the 1st time since Nov 3rd when they announced more asset purchases for the sole purpose of suppressing interest rates. Instead since then, the 10 yr yield is up 78 bps and the average 30 yr mortgage rate is up by 66 bps. Oh to be a fly on the wall of that meeting.

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