Risk Aversion Evident Across Markets; Euro Slumps
June 28, 2010 at 13:12 UTC || By Forex Playmaker
Investors remain extremely skeptical as to the health of the global economy, pushing Government bond yields to record lows and the euro below $1.23.
Government bonds, led by US Treasuries, have enjoyed a stellar first half of 2010, with gains accelerating in recent sessions. Investors continue to pile into safe haven securities, pushing yields on 10-year Treasuries to their lowest levels since 2009. Earlier this morning, yields on such securities were a paltry 3.05%, meaning investors are willing to loan their hard-earned dollars to Uncle Sam at a 3% yearly return for 10 years.
In the Forex marketplace, risk aversion is again taking hold, as the euro continues its slump against its major counterparts while the Japanese yen outperforms. The euro is back below the 1.23 handle against the greenback while trading under 110 yen.
Bucking the trend toward risk aversion is the British pound, where traders are speculating on a Bank of England rate hike in the near-term.
The major test for riskier assets will come this Friday, when the Jobs Report is scheduled for release. The consensus estimate is looking for 113,000 private sector jobs added in June, though investors should prepare for disappointment…
