In the US and the euro area, interest rates are on the rise – in Switzerland, a second consecutive rate cut

Interest rates on US government bonds started to rise after Thursday’s statistical releases.

At the time of the review, the yield on the ten-year U.S. Treasury note rose 4.8 percentage points to 4.271 percent, while the two-year yield rose 2.7 percentage points to 4.739 percent.

The US current account was a $237.6 billion deficit in the first quarter, down from a $206.8 billion deficit. In the previous quarter, the current account was a loss of USD 194.8 billion.

In the week before June 15, 238,000 new jobless claims were filed in the US, compared to 242,000 in the previous week.

The U.S. construction sector grew clearly weaker than expected in May. There were 1.28 million new housing starts in May, while the number was expected to increase to 1.37 million. Starts fell sharply from April’s 1.36 million.

New building permits in the U.S. fell short of 1.39 million in May, while a consensus estimate compiled by Bloomberg expected 1.37 million. 1.36 million building permits were issued last month.

Ahead of the statistical releases, futures on Wall Street’s major stock market indices were rising. Shortly after the announcement, Dow Jones futures fell to zero, but futures for the S&P 500 and Nasdaq 100 indexes remained positive.

The interest rate decision lowered interest rates in the UK

In Europe, interest rates on British government bonds fell after the Bank of England’s decision. As expected, the Bank of England kept its key interest rate unchanged at 5.25 percent.

The yield on Britain’s 10-year government bond fell by 1.2 percentage points, while the yield on its two-year bond fell by 3.5 basis points.

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Although the annual change in British consumer prices was 2.0 percent in May, the central bank is still waiting for sustained evidence that inflation will remain under control, in line with the central bank’s inflation target.

According to the central bank, inflation figures will pick up in the second half of the year as energy prices fell at the end of last year, affecting price levels in reference months.

In Britain, the Prime Minister is stoking market jitters Rishi Sunakin Early elections were held on initiative. Sunak’s conservative party is expected to suffer a crushing defeat in the election.

In Norway, you can wait for interest rates to drop

As expected, Norway’s central bank also kept its policy rate unchanged at 4.50 percent. The key interest rate will remain at the same level “for some time to come,” according to current estimates from the Norwegian central bank’s board.

The annual change in Norwegian consumer prices was 3 percent in May, falling to the lowest level since July 2021. However, the target is far from the two percent target. Core inflation fell to 4.1 percent, the lowest in nearly two years, but above the consensus estimate of 3.9 percent.

Interest rates on Norwegian government bonds were clearly rising at the time of the review.

Second rate cut in a row in Switzerland

Unlike Britain and Norway, the Swiss National Bank cut its key interest rate on Thursday to 1.25 percent from 1.50 percent previously. This is the second consecutive rate cut.

A consensus forecast compiled by Bloomberg expected the key interest rate to remain unchanged, although two-thirds of analysts polled by Reuters expected a rate cut.

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After the interest rate cut, the Swiss franc weakened against all other major currencies, and interest rates on Swiss government bonds fell.

In the euro area, interest rates are rising

In the euro area, interest rates on government bonds are rising mainly. The ten-year German government bond yield rose 2.9 percentage points, while the two-year bond yield rose 1.9 percentage points.

The yield on France’s 10-year government bond rose 1.6 percentage points and the rate on its two-year debt rose 1.3 points in preparation for a snap election next week.

A potential electoral victory for the far-right National Alliance in French parliamentary elections would lead to increased public spending based on the party’s economic plan, which would further strain France’s already heavily indebted state economy.

On Tuesday, the EU Commission asked seven countries to strengthen adjustment measures to bring national debt under control. In addition to France, this includes Belgium, Italy, Hungary, Malta, Slovakia and Poland.

The Eurozone consumer confidence forecast for June will be released at 5 a.m. Finnish time on Thursday.

At 16:00, the euro is worth 1.07 dollars, 169.95 yen and 11.19 Swedish kroner. The dollar is 158.55 yen and the pound is 1.27 dollars.

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