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Week Ahead: SCOTUS Decision on Tariffs? 8 Fed Officials Speak as the Market Discounts almost 65 bp of Cuts this Year
Last week began with the LDP's stunning victory in Japan. However, rather than sell-off as the market expected, the yen and JGBs rallied. It appears that the yen's use as a levered funding leg for carry trades had already been adjusted. At the start of the week, reports circulated that Chinese officials were encouraging local financial institutions to de-risk from US Treasuries. Yet despite it and the better-than-expected January US employment data, the 10-year Treasury yield fell nearly 15 bp last week, the most in five months. The yield slipped below 4.05% ahead of the weekend the lowest in more than two months. ... (full story)