ChainCatcher message, analysts indicate that the bearish flattening pressure on U.S. Treasuries remains due to the market lowering expectations for a Federal Reserve rate cut. Eugene Leow, an analyst at DBS Group, commented that as the two-year U.S. Treasury yield recently surged, people have reduced their bets on a Federal Reserve rate cut. This veteran interest rate strategist stated, "Meanwhile, as market dysfunction has eased somewhat, the rapid sell-off of long-term U.S. Treasuries has also cooled." Bearish flattening typically refers to a situation where, due to expectations of tighter monetary policy, short-term yields rise faster than long-term yields.

ChainCatcher news, according to Jinshi reports, U.S. Treasury investors are beginning to bet that the Federal Reserve's policy focus will shift from curbing inflation to addressing the slowdown in economic growth. Under this expectation, U.S. Treasuries have risen for six consecutive trading days, with yields falling to their lowest level of the year.Morgan Stanley strategists indicate that if the market's expectations for Federal Reserve policy shift slightly, the 10-year U.S. Treasury yield could potentially fall below 4%. Currently, traders have resumed expectations for two rate cuts by the Federal Reserve this year (each by 25 basis points) and anticipate further cuts next year to around 3.65%. The bank believes that if market expectations for rates drop to 3.25%, the 10-year U.S. Treasury yield could fall below 4%.Recently, U.S. Treasury auctions have performed strongly, with Wednesday's auction of $44 billion in seven-year Treasuries yielding 4.194%, lower than the pre-auction market close of 4.203%, indicating demand exceeded expectations. Analysts point out that investors see reasons for rate cuts not only from economic growth indicators but also from U.S. fiscal and immigration policies, including Trump's threats to impose tariffs on major trading partners.So far this year, U.S. Treasuries have risen 2.3%, surpassing the S&P 500 index's increase of 1.3%. The personal consumption expenditures price index for January, to be released on Friday, may become a key data point influencing market expectations.

ChainCatcher news, according to Sina Finance, the US stock market will be closed on January 9 (Thursday) in observance of a national day of mourning for the late 39th President of the United States, Jimmy Carter. Normal trading will resume on January 10 (Friday).Trading in stock index futures under the CME will end early at 22:30 Beijing time; trading in interest rate and agricultural futures will end early at 02:15 Beijing time on January 10; trading in Treasury futures will end early at 03:30 Beijing time on January 10; trading in precious metals, energy, foreign exchange, and cryptocurrency futures will proceed as usual.

ChainCatcher news, Glen Capelo, Managing Director of Fixed Income at Mischler Financial Group, stated that a 25 basis point rate cut by the Federal Reserve is likely to lead to a sell-off of U.S. Treasuries, although this largely depends on Powell's press conference. Michael Rosen, Managing Partner and Chief Investment Officer at Angeles Investments, believes that the current bond market is pricing in the Fed's rate cut pace too aggressively. The market expects the Fed to cut rates by 250 basis points next year, a magnitude that is only possible in the case of an economic recession. Therefore, he believes that the decline in short-term U.S. Treasury yields will be lower than market expectations, while long-term yields may even start to rise from now. (Jin Shi)

ChainCatcher news, Bitfinex analysts indicate that the ever-expanding U.S. debt may solidify Bitcoin's position, "The $35 trillion U.S. national debt highlights the importance of Bitcoin as a 'hard currency' and could become a catalyst for Bitcoin's next upward cycle... This may prompt investors to seek other stores of value like Bitcoin, which are often seen as a hedge against economic inefficiency."

ChainCatcher news, BitMEX co-founder Arthur Hayes analyzed in a personal blog post that Japan's fifth-largest bank, Norinchukin Bank, recently announced it will sell $63 billion worth of U.S. and European bonds. This suggests that other Japanese banks may follow suit, with total sales reaching up to $450 billion in U.S. Treasuries.Hayes pointed out that the reason for the large-scale selling of U.S. Treasuries by Japanese banks is the sharp widening of the U.S.-Japan interest rate differential, which has led to a significant increase in the foreign exchange hedging costs for holding U.S. Treasuries, resulting in losses from holding these bonds. In an election year, U.S. Treasury Secretary Yellen is likely to ask the Bank of Japan to absorb these sold bonds through the Federal Reserve's FIMA repo tool, in order to prevent a sharp rise in U.S. Treasury yields and avoid turmoil in the financial markets.Hayes believes that if the Federal Reserve engages in large-scale money printing to repurchase the U.S. Treasuries sold by Japan, it will bring a new wave of dollar liquidity to the cryptocurrency market, fueling a new cryptocurrency bull market. He stated that to maintain the current dollar-based financial system, the supply of dollars must increase, which will undoubtedly drive up the prices of crypto assets, including Bitcoin.

ChainCatcher news, according to Coindesk, based on the compilation by real-world asset data company RWA.xyz, the market value of tokenized, blockchain-based investment products that package U.S. Treasury bills, bonds, and money market funds has reached a total of $614 million.Cryptocurrency investors' demand for tokenized government bonds has been steadily increasing, as the yields on U.S. government bonds (widely regarded as a risk-free rate) have surpassed the yields in decentralized finance (DeFi), with the current Federal Reserve raising interest rates to the highest level since 2007. Additionally, this year, investor-focused blockchain-based government bond products have been issued by companies such as OpenEden, Ondo Finance, and Maple Finance. (Source link)

ChainCatcher news, decentralized investment bank Ondo Finance has launched a tokenized fund that allows stablecoin holders to invest in bonds and U.S. Treasuries, with investors receiving tokenized fund rights that can be transferred on-chain.It is reported that Ondo aims to create an on-chain financial ecosystem that supports both permissioned and permissionless assets, ultimately enhancing market accessibility, transparency, and efficiency. (Source link)