0913 GMT – The 10-year U.S. Treasury yield edges higher as markets await next week’s Federal Reserve policy meeting. “The Federal Reserve’s rate decision next week is expected to play a critical role in the bond market,” DHF Capital’s Erik Boekel says in a note. A dovish stance would likely to push yields lower while a hawkish outlook could provide support for the dollar and yields, the chief commercial officer says. Money markets price in the next Fed rate cut for June, according to LSEG data. The 10-year Treasury yield rises 2 basis points to last trade at 4.297%, according to Tradeweb. (emese.bartha@wsj.com)

Bond Market Volatility Declines But Risks Remain

0737 GMT – Bond market volatility is calming, although U.S. Treasury and German Bund moves remain somewhat out of sync following spectacular transatlantic decoupling from both ends over recent weeks, says Commerzbank Research’s Michael Leister. “Realised vols [volatilities] continue to subside despite heightened political brinkmanship in Germany and the U.S. while tariff threats are keeping a lid on risk sentiment,” the head of interest rates strategy says in a note. In Germany, a fiscal deal is being debated without an agreement Thursday, “but an 11th hour agreement still remains our base case,” Leister says. The 10-year Bund yield rises 1 basis point to 2.863%. The 10-year U.S. Treasury yield is up 1.7 basis points at 4.292%, according to Tradeweb. (emese.bartha@wsj.com)

Source: The Wall Street Journal

London Loves Business