The yield on the 10-year US Treasury-Inflation Protected Securities (TIPS) slumped to a record low of -0.907% on Thursday, suggesting that investors are pricing higher inflation expectations amid unprecedented stimulus in the economy. As of writing, the 10-year TIPS yield was flat on the day at -0.884.
Meanwhile, the yield on the benchmark 10-year US Treasury bond was last seen down 3.35% at 0.581%.
Further, the sharp drop in TIPS yields shows that markets are expecting the Federal Reserve to extend its dovish stance as data start to point out to a stall in the recovery.
Market reaction over the TIPS
This seems to be the main developmemt driver behind the broad-based USD weakness on Thursday. The US Dollar Index , which formed a strong inverse correlation with the US stocks since the beginning of the coronavirus crisis, is falling alongside Wall Street’s main indexes.
Meanwhile, the DXY was negative 0.22% on the day at 94.75 while the S&P 500 Index (SPX) and the Dow Jones Industrial Average (DJIA) were both minus 1.45%.
However the asian session will be in focuss and the contunation may stay in focus.
Furthermore,In India session FII buying and DII selling which lead buyers in mass and giving positive closing Nifty 50 Trading near 11200 levels. The global cues though negatively trafinng the USD seems giving benefits to Indian rupees.