After a solid performance in January, the US bond market between in a less favourable phase, marked by an improvement of short-term indicators. The main threat will come with employment figures - with in point of the week, the monthly report published Friday by the US Labor Department. Economists estimate that the United States have created 10,000 jobs after in destroying 85,000 year. "The component on the use of the ISM index, which was unveiled yesterday, has also pushed upward forecasts of creations of posts", highlights the team of BNP Paribas, which fears of pressure on the bond these days, if the risk aversion confirms its shortness of breath. Monday, the rate to 10 years is stretched 6 basis points following the publication of the indicator of industrial activity (ISM), which reached its earlier since 2004.
"The 2011 budget is disappointing."
Performance of State borrowing has also responded to the presentation to the Congress of the draft budget by Obama administration, in particular the announcement of a deficit revised upward for fiscal 2010, 1.556 billion.
"For us, the 2011 budget is rather disappointing: the maintenance of several stimuli is probably good for the prospects for growth in the short term, but not for financial stability or fiscal stringency", deplore the strategists of Société Générale. According to them, the budget deficit may also be even more important once the project will be passed by the Capitol.
On this occasion, Treasury announced Monday that the net emissions of debt of short and long term on the period from January to March is projected at $ 392 billion, after a net lift of 260 billion in the first quarter of the fiscal year (i.e. the period from October to December 2009).
However, the amount was reviewed lower than initial estimates. The details of the quarterly financing plan will be published today.
Employment, variable key
The appetite of investors toward American State bonds is also very much conditioned by expectations of change in the monetary policy of the Federal Reserve, in the field of conventional and unconventional.
Employment there still is a key variable determining the calendar. "The Fed is more likely to act too late than too early", said Nicolas Forest in Dexia AM. "Given the size and the constitution of its balance sheet, it is facing a structural constraint that prevents him from being too fast in its exit strategy." His record currently exceeds 2,200 billion. According to the specialist of the bond, the US Central Bank will remain cautious - it reiterated late January his ambition to keep rates low "for an extended period." It could operate a light Tower of screw end of the year only.
Remains that the concerns on Chinese monetary tightening and supervision Bank such as the American President has mentioned them in January are not addressed, and can still feed the interest for shelters, as American borrowing assets. Yesterday, the intervention of Paul Volcker, economic advisor to Obama, before the Banking Committee of the Senate on activities at risk in banks, was the highly anticipated title. The 10-year rate stabilized at 3.64 prior to this appointment.