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Less Dovish Fedspeak Sparks A Pullback On Friday

GOLD

Gold is slightly firmer in the Asia-Pac session, after closing 0.8% lower at $2019.62 in dealings ahead of the weekend.

  • Friday’s drop can be attributed to a pushback by Fed officials against market expectations for early and aggressive easing in 2024. NY Fed Williams said “We aren’t really talking about rate cuts right now” and suggested the Fed is still focused on whether rates are sufficiently restrictive to get inflation back to its 2% target. Meanwhile, Atlanta Fed Bostic said he sees two 25bps rate cuts in the latter half of 2024.
  • The US Treasury 2-year yield surged by 10bps before settling 5bps higher at 4.44% by the end of Friday's trading. The 10-year yield also showed an initial increase but quickly retraced, ultimately finishing the week with minimal change at 3.91%, slightly above the weekly yield low.
  • Currently, US tsys are dealings flat to 2bps richer in today's Asai-Pac session.
  • Equally significant, the closing figures on Friday revealed that implied Fed funds futures continued to signal a 19 basis point easing by March, 63 basis points in cuts by June, and a cumulative 140 basis points for the year 2024.
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Gold is slightly firmer in the Asia-Pac session, after closing 0.8% lower at $2019.62 in dealings ahead of the weekend.

  • Friday’s drop can be attributed to a pushback by Fed officials against market expectations for early and aggressive easing in 2024. NY Fed Williams said “We aren’t really talking about rate cuts right now” and suggested the Fed is still focused on whether rates are sufficiently restrictive to get inflation back to its 2% target. Meanwhile, Atlanta Fed Bostic said he sees two 25bps rate cuts in the latter half of 2024.
  • The US Treasury 2-year yield surged by 10bps before settling 5bps higher at 4.44% by the end of Friday's trading. The 10-year yield also showed an initial increase but quickly retraced, ultimately finishing the week with minimal change at 3.91%, slightly above the weekly yield low.
  • Currently, US tsys are dealings flat to 2bps richer in today's Asai-Pac session.
  • Equally significant, the closing figures on Friday revealed that implied Fed funds futures continued to signal a 19 basis point easing by March, 63 basis points in cuts by June, and a cumulative 140 basis points for the year 2024.