Treasury yield curve flattens further after the Fed rate decision

Omkar Godbole FXStreet Contributor

The treasury yield curve i.e. the difference between the 10-year treasury yield and the 2-year treasury yield narrowed to 80 basis points after the Fed maintained the outlook for three rate hikes this year.

The 10-year treasury yield fell to 2.103%; the lowest level since November 10. The 10-year yield was last seen trading around 2.14%. The 2-year yield dropped to a low of 1.29% before staging a sharp recovery to 1.34%.

The yield curve or the difference stood at 85 basis points prior to the dismal CPI release and was seen hovering around 82 basis points ahead of the Fed rate decision.

The yield curve has been flattening since the start of the year and has been accompanied by the sell-off in the US dollar.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD flat lines near 1.1800 as traders brace for US PPI release

The EUR/USD pair trades on a flat note near 1.1800 during the early Asian session on Friday. The pair steadies as softer Eurozone inflation offsets US tariff uncertainties. Traders await the preliminary reading of the Consumer Price Index from Germany on Friday for more clues about the pace of future policy easing. On the US front, the Producer Price Index report will be released.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.