UBS s Suresh Tantia expects two rate cuts by the Fed in 2019, with a focus on the US 10-year bond yield falling below 4% by year-end. Favoring yen over Chinese yuan in the FX market amid predictions of rate cuts. Tantia says: " We do not think the story of the rate cuts have been delayed. It is going to happen sometime this year and our view is that most likely in the September meeting Fed will start to cut rates."
Treasuries gave back ground after an early rally but still managed to extend the upward move seen over the two previous sessions. Bond prices moved roughly sideways in afternoon trading, hovering firmly in positive territory.
Following the sharp pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Wednesday. Bond prices saw modest strength for much of the day before rallying late in the session.
After 2 straight months of inflows, foreign portfolio investors (FPIs) turned sellers in April. FPIs sold Indian equities worth ₹8,671 crore during the month on the back of a rise in US bond yields and higher crude oil prices.