Aurelia Butler

NEW YORK (Reuters) -Bond investors who had positioned portfolios defensively in anticipation of a U.S. recession are adjusting their strategies for a surprisingly resilient economy that will likely keep interest rates higher, longer than they had expected.A so-called soft-landing economic path – in which the Federal Reserve manages to curb inflation without causing output to contract – has gained more consensus in recent weeks, prompting some investors to take on more risk or reduce bets that safe-haven assets such as Treasuries would rally.Felipe Villarroel, a portfolio manager at TwentyFour Asset Management, which specializes in fixed income, said he was shifting some allocations from 10-year Treasuries to 10-year U.S. investment-grade corporate bonds. This reverses a build-up in positions in 10-year U.S. government bonds that started a year ago when yields were rising on the back of the Fed’s interest rate hikes.”The tail risk of a hard landing is being priced out, and that doesn’t mean we’re too bullish on the economy, but it does mean that the weighted average scenario has improved,” he said.For investors who had expected more economic strife, sticking to those calls has become increasingly difficult. Over the past year the unemployment rate has remained defiantly low, and growth has run consistently above trend.”It’s going to take longer for rates to rally,” said John Madziyire, senior portfolio manager and head of U.S. Treasuries and TIPS at Vanguard Fixed Income Group. “As a result, we have reduced those positions and expect them to happen way later than we expected previously.”Treasuries generally become more valuable, which means their yields decline, during periods of economic weakness, but long-term yields have spiked in recent weeks, with the benchmark 10-year hitting an almost 10-month high on Tuesday.In addition to pricing for more economic resilience, bond investors are also factoring in the Bank of Japan’s recent shift in its yield curve control policy, issues around U.S. debt sustainability as highlighted by Fitch’s U.S. downgrade, and the large funding requirements announced by the Treasury.”Recession or no recession, we think the probability of higher-for-longer interest rates is far greater than the likelihood of near-term cuts,” credit investment firm Oaktree Capital said in a recent note.Danielle Poli, managing director and co-portfolio manager of the Oaktree Diversified Income Fund, told Reuters the company shifted allocations, with a view of higher rates for longer, for instance by investing more in floating-rate debt. However, Oaktree is now more selective in leveraged finance, a sector in which borrowers are more susceptible to higher borrowing costs.Long-term concerns around the U.S. fiscal position have recently boosted 30-year Treasury bond yields about 20 basis points, said Anthony Woodside (OTC:WOPEY), head of U.S. Fixed Income Strategy at LGIMA.He said he expected term premiums, or the compensation investors demand for holding long-term bonds, to keep rising.”We have been tactically putting on yield curve steepeners in recent weeks but setting relatively tight risk limits on these trades given elevated levels of volatility,” Woodside said.LOW CONVICTIONWith the bulk of the most aggressive monetary tightening in decades likely in the rear-view mirror, many on Wall Street are admitting they got their forecasts wrong.”I think that the biggest mea culpa for me personally but also, I think, widely across the market, is getting it wrong that interest rates could be higher for longer and there could not be a recession, which would be positive for risk-on trades,” said Stephen Dover (NYSE:DOV), chief market strategist at Franklin Templeton Investment Solutions.So-called risk assets such as equities and high-yield corporate bonds, which tend to perform badly during economic downturns, have emerged strongly from last year’s slump while safer bets such as U.S. Treasuries have lagged.Rising optimism around a soft-landing, however, comes with several caveats, making it difficult for investors to embrace the prevailing macroeconomic outlook with conviction.A re-acceleration in inflation could lead to higher rates than the market has priced in. This would increase the chances a sharper economic slowdown. Meanwhile, the lag in the full impact of the Fed’s rate hikes can be unnerving investors.Some are navigating the uncertainty by combining exposure to higher-yielding short term bonds with long-term bonds in case of a downturn.Chip Hughey, managing director of Fixed Income at Truist Advisory Services, said he recommended a “barbell structure” which hedges short term paper with long-term bonds “should we move into a more risk off period.”For Madziyire’s team at Vanguard this has meant that trades have become smaller.”There is discretion for portfolio managers to put on a position, within a certain tolerance, but is not going to be something big,” he said. “That’s a function of the fact that there’s lack of consensus as to where we’re going.” More

1. Futures rise after declines on Wall StreetU.S. stock futures pointed higher on Wednesday, stabilizing after shares on Wall Street slipped in the prior session, with investors digesting stronger-than-projected retail sales figures and awaiting the release of earnings from retail chain Target.At 05:21 ET (09:21 GMT), the S&P 500 futures contract gained 9 points or 0.19%, Dow futures jumped by 63 points or 0.18%, and Nasdaq 100 futures added 36 points or 0.24%.All three of the main indices closed lower on Tuesday following new data that showed the value of U.S. retail purchases rose by 0.7% month-on-month in July, up from 0.3% in June and above estimates of 0.4%. Some traders took the number as a sign that Federal Reserve policymakers could leave borrowing costs higher for longer to keep recently cooling inflation on the downward path.A Fitch analyst also told CNBC that the agency may soon announce rating downgrades of several U.S. banks, including JPMorgan Chase (NYSE:JPM). Financial sector stocks dropped on the report, while the KBW Bank index declined by 2.8%.2. Target to report with sales in focusThe resilient retail sales report may come at an opportune time for America’s big-box retailers, many of whom have struggled to entice inflation-hit customers into their stores throughout much of 2023.One such company, Target (NYSE:TGT), is expected to post its first quarterly revenue decline in six years when it unveils its latest results Wednesday. Like peer Walmart (NYSE:WMT) and DIY-giant Home Depot (NYSE:HD), the Minneapolis-based group has seen consumers turn away from spending on nonessential items like clothing and patio furniture in response to recently elevated prices.Shares in Target have shed more than a sixth of their value so far this year.Target, which relies heavily on expenditures on such discretionary items to fuel its business, has already warned that returns would be weaker during the second quarter. To make matters worse, controversy over its Target Pride collection is also seen weighing on sales.But there may be relief on the horizon. Consumers are continuing to shell out cash for services like travel and dining out, in the latest sign that the Fed may be able to engineer a so-called “soft landing” – corraling inflation without causing a meltdown in the wider economy. When, or how, this could translate into spending on the sort of items like electronics and beauty products that can revive Target’s fortunes remains uncertain.3. TPG eyes stake in EY consulting arm – FTPrivate equity firm TPG Capital is considering taking a possible stake in professional services group EY’s consulting division, according to the Financial Times, in a move that could reinvigorate an attempt by the Big Four group to separate its operations.TPG proposed a debt-and-equity deal that would sever EY’s consulting business from its audit arm, the FT reported. Citing a letter sent to EY’s global and U.S. heads, the paper said the consulting unit would then be listed on the stock market at a later date, although TPG did not suggest a value for the business.Earlier this year, EY scrapped a plan to float the consulting business that would have given the new firm an enterprise value of around $100 billion. Such a move would have amounted to the biggest shake-up in the accounting industry since the failure of Enron and WorldCom accountant Arthur Andersen in 2002.However, the FT quoted one person familiar with EY’s internal discussions as saying that “the organization will not pursue this expression of interest.” TPG and EY both declined to comment to the FT.4. VinFast’s electric debutShares in VinFast soared by 255% in their debut on the Nasdaq stock exchange after the Vietnamese electric vehicle (EV) maker said it would likely start raising funds from investors in the next 18 months.The firm, which went public via a merger with a special-purpose acquisition company, ended a day of thin trading valued at $85 billion, giving it a greater market capitalization than U.S. car giants Ford (NYSE:F) and General Motors (NYSE:GM).Formed as a unit out of Vietnam’s biggest conglomerate Vingroup, VinFast is aiming to take a new approach to EV distribution that it hopes will give it an edge against market leader Tesla (NASDAQ:TSLA). Instead of following Tesla’s direct-to-consumer strategy, VinFast is expected to partner with overseas dealers. Chief Financial Officer David Mansfield told Reuters that a number of strategic and institutional investors are already “lined up,” even though the group has yet to turn a profit.VinFast is attempting to become a new EV player at a particularly precarious time for the industry. Tesla and its rivals in China have slashed prices to try to juice demand and snap up market share, boosting revenue but threatening profit margins in the process. VinFast’s VF8 car is currently more expensive than Tesla’s Model Y (at least in California), while the company has yet to bring its VF9 marque to the U.S.5. Oil prices volatile amid China fears, U.S. inventory drawOil prices were choppy on Wednesday, as traders weighed concerns over China’s sputtering economy against a bigger-than-expected draw in U.S. inventories.A string of recent Chinese economic data, including retail sales and industrial output, have missed economists’ estimates, pointing to ongoing sluggishness in the post-pandemic recovery of the world’s biggest oil importer. China’s central bank slashed interest rates on Tuesday in a bid to help reignite the broader economy, although analysts have cast doubts over the effectiveness of the move.Meanwhile, data from the American Petroleum Institute showed that U.S. oil stockpiles saw a much larger-than-anticipated 6.2 million barrel draw last week. Official inventory data from the Energy Information Administration is due later on Wednesday for confirmation.By 05:22 ET, the U.S. crude futures traded 0.20% lower at $80.83 a barrel, while the Brent contract dipped 0.2% to $84.72. Both benchmarks had weakened to their lowest since Aug. 8 in the prior session. More

Lower gas and electricity costs drove a sharp drop in headline UK inflation in July but underlying price pressures failed to fall as expected, maintaining pressure on the Bank of England to keep interest rates high. Consumer prices were 6.8 per cent higher in July than a year earlier, with the rate of increase down from 7.9 per cent the previous month, according to data published on Wednesday by the Office for National Statistics. This drop resulted in the lowest inflation rate since February last year.The headline figure met economists’ expectations and will come as modest relief after wage data on Tuesday was surprisingly strong. But the details suggested Britain had not made progress in solving its inflation problem.Stripping out food and energy prices, core inflation rose at an unchanged annual rate of 6.9 per cent in July and services prices increased at a faster pace, maintaining pressure on the BoE to keep monetary policy tight in order to restore price stability.The central bank’s Monetary Policy Committee this month raised interest rates by 0.25 percentage points to a 15-year high of 5.25 per cent. Markets expect a 15th consecutive increase when the nine-member panel meets in September.Suren Thiru, economics director at the ICAEW accountancy trade body, said: “Although these figures provide reassurance that the inflation tide has turned, this latest drop owes more to lower energy bills, following the reduction in Ofgem’s energy price cap, than to a broader easing of price pressures.”The lower quarterly energy price cap led to a 15 per cent fall in gas and electricity prices in July, which contributed to an overall 0.4 per cent drop in prices compared with June.Food prices stabilised in July, rising only 0.1 per cent in the month and bringing the annual rate of food price inflation down from 17.3 per cent to 14.9 per cent.Market reaction to the data was muted, as it was close to expectations. Sterling edged higher to $1.274 against the dollar, with the yields on gilts barely moving in morning trading. With little movement in the bond markets, the figures are unlikely to move mortgage rates.But the improvements in energy and food prices were offset by signs that there was no moderation in pricing pressures in most other areas.Prices of core goods rose 0.3 per cent over the month, with the annual inflation rate remaining constant at 6.9 per cent rather than dropping to 6.8 per cent, as economists expected.Worse news for the BoE was that services prices, which officials see as the best indicator of underlying domestic inflation, rose 0.8 per cent in July. The annual rate of services inflation increased from 7.2 per cent in June to 7.4 per cent in July, the highest rate since March 1992.Economists said this would worry policymakers because it showed the fast pace of price rises was a more entrenched domestic problem, rather than the unavoidable consequence of higher wholesale gas and electricity costs. Paula Bejarano Carbo, associate economist at the National Institute of Economic and Social Research, said: “We have yet to see a turning point in the underlying rate of inflation, which remains stagnant at around 7 per cent.”Ruth Gregory, deputy chief UK economist at the consultancy Capital Economics, said: “With wage growth and services inflation both stronger than the bank had expected, it seems clear that the bank has more work to do.”Although the underlying data showed worse inflationary pressures than hoped, chancellor Jeremy Hunt hailed the fall in the headline figure of 6.8 per cent as a mark of progress towards the government’s pledge to halve the inflation rate this year.

But he noted there was more work to do. “We’re not at the finish line. We must stick to our plan to halve inflation this year and get it back to the 2 per cent target as soon as possible,” he said in a statement.Some economists cast doubt on the likelihood of Rishi Sunak meeting his promise, which would require the inflation rate in the fourth quarter of 2023 to fall at least to 5.3 per cent.The Institute for Fiscal Studies, a think-tank, said it was far from a foregone conclusion that the prime minister would meet his target because most of the known improvements in energy and food had happened and progress was yet to be made in moderating price rises elsewhere. Heidi Karjalainen, IFS research economist, said: “The progress that has been made is mainly due to the fact that commodity and energy prices are no longer increasing at the rates they were last year. The challenge is that core inflation remains stubbornly high, and considerably higher than was expected back at the start of the year.” More

Trying to figure out the German version of plus ça change, plus c’est la même chose was a waste of several minutes of Alphaville’s time.Plus, it’s not really fair: things have changed for Germany. Europe’s biggest economy entered the pandemic at the end of a strong decade with virtually zero economic momentum, and has been struggling to relocate its joie de vivre ever since.Based on IMF predictions, its output is set to contract by 0.3 per cent this year — the only major advanced economy that is expected to see GDP shrink:

Qu’est-ce qui se passe? Berenberg’s Holger Schmieding has been analysing the German economy for longer than most — labelling it the “sick man of Europe” in the late 90s.This week he released a chunky new report looking at what’s working — and what isn’t — for the Germans. There’s some surprisingly upbeat conclusions:Many observers of the German downturn make two mistakes: (i) They fail to distinguish between short-term gyrations caused by shocks or falls in global demand and the longer-run trend shaped by domestic supply-side policies. The business cycle looks set to turn up again by spring 2024. (ii) They misunderstand the nature of the German economy. Its key feature is not the focus on specific products, such as cars or chemicals, but the myriad of “hidden champions” with a proven record of adapting to serious shocks and challenges – if politics does not get in the way. Schmieding highlights some key advantages Germany has now versus the dodgy decade it entered from 1995 to 2004. Condensed, they are:— Record employment (making structural change easier to bear)— Strong fiscal position— Reforms underway to immigration and planning rules— Broader political consensus around reformHe writes:Germany faces major challenges, ranging from labour shortages to outdated bureaucratic procedures and partly misguided energy policies. But the current wave of pessimism is far overdone, in my view. Of course, the “golden decade”, which I predicted in a research report in 2010 due to the success of the Agenda 2010 reforms of 2003-2005, is over. Success has bred complacency and new shocks have battered the economy. Germany has duly lost some ground; however, its supply potential remains roughly in line with the European averageA particularly interesting part of his analysis concerns China, which is Germany’s largest export market. A Chinese slowdown would seem to be bad news for the German manufacturing powerhouse. Schmieding disagrees:Some German sectors, such as the car industry, have become heavily dependent on the Chinese market for their total sales and profits. In the last few years, major German car manufacturers sold some 35-40% of the cars that they produce in China. The same holds true for some other companies, such as Germany’s leading producers of semiconductors. However, the fate of global car companies headquartered in Germany and listed on its stock exchange matter less for the German economy than is often assumed. The profits they earn from employing Chinese workers to assemble cars in China with inputs from China to sell to Chinese customers play no major role for the German economy itself. They matter only in modest ways, primarily as the partial transfer of profits back to headquarters helps to pay salaries at home and the dividends to the minority of their stockholders who reside and pay taxes in Germany…We do not expect China to stimulate its economy to such an extent that exports to China could recover strongly in the second half of 2023. The heydays of strong growth in China are over.

Indeed, he adds, the rise of near-shoring and friend-shoring could even be a boost for Germany:In response to geopolitical risks highlighted by Russia’s war against Ukraine and by China’s threats against Taiwan, companies are trying to further reduce their dependence on China through local-for-local investments. They want their Chinese operations to depend less on inputs from countries that might conceivably sanction China, while diversifying their sourcing of inputs for non-Chinese operations away from China. Once the current cyclical downturn is over, the need to restructure supply chains could even boost demand for German machine tools for a while.It’s not a glowing endorsement of Germany’s economic trajectory, but it’s far from damning. The full (18-page) report is free to read; your comments (as ever) can go in the box below. More

A year ago, President Joe Biden launched a new era of US industrial policy, signing into law the Inflation Reduction Act and the Chips and Science Act. Passed within days of each other last August, the two laws offered more than $400bn in tax credits, loans and subsidies, all designed to spark development of a domestic cleantech and semiconductor supply chain.Over the past year, the Financial Times has identified more than 110 large-scale manufacturing announcements — including in semiconductors, electric vehicles, batteries and solar and wind parts — spurred by the landmark legislation. We have examined them and spoken to experts, and here is what we have learned.

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$224bn worth of projects and 100,000 jobsAt least $224bn in cleantech and semiconductor manufacturing projects have been announced in the US since the passage of the IRA and the Chips Act. In total, they promise to create 100,000 jobs. The FT tallied company announcements of at least $100mn, from August 2022 to this week.While the pace of announcements has slowed, each month since the acts passed has brought new projects. This month, Singapore-based Maxeon Solar Technologies announced a $1bn solar panel facility in Albuquerque, New Mexico, and US manufacturer First Solar picked Louisiana for its fifth factory, worth $1.1bn — the largest capital investment in the region’s history.“The [IRA] is working to accelerate the nation’s energy transition, spur economic growth, and launch a renaissance in American manufacturing. I don’t think in my career I’ve ever seen a law have a greater impact on economic development in this country,” said Gregory Wetstone, chief executive officer of the American Council on Renewable Energy, a clean energy lobbying group, at a panel on Monday.

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The largest commitments have come from semiconductor groups: Intel will expand a campus in Arizona and Taiwan Semiconductor Manufacturing Company will build a second fabrication plant in the same state; IBM will invest in New York’s Hudson Valley region and Micron will build the US’s largest semiconductor plant in Clay, New York.Planned project sites pepper the country, but certain states and regions are streaking ahead, and new manufacturing hubs are appearing. Georgia and South Carolina have secured the most projects, with 14 and 11, respectively. Michigan and Ohio are next, and Arizona follows.“It just gives you chill bumps to think about in the next 10 to 20 years — what is the Midlands region gonna look like?” said Ashely Teasdel, South Carolina’s deputy secretary of commerce, of Volkswagen’s $2bn plan to build an electric vehicle plant in the state’s central region. South Carolina awarded Volkswagen a $1.3bn incentive package to secure the project.

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Republican districts have secured the dollarsThe FT found that more than 80 per cent of cleantech and semiconductor investments announced in the past year are heading to Republican districts, despite there having been no votes from congressional Republicans for the IRA and only lukewarm support for the Chips Act. “We have incredible support from both Democrats and Republicans in Georgia,” said Marta Stoepker, spokesperson for Qcells, a South Korean solar manufacturer that this year made a $2.5bn investment in two Republican districts in Georgia, including one represented by GOP firebrand Marjorie Taylor Greene. But a Republican-led committee in the House of Representatives recently approved a bill that would weaken the IRA, while the rightwing Heritage Foundation think-tank’s Project 2025 has already created a lengthy manual calling on a potential future Republican administration to roll back the legislation. “One of the biggest differences in policy between a Republican candidate and a Democratic candidate is going to be what is going to happen with energy,” said Diana Furchtgott-Roth, a former Trump administration official now at Heritage. “Project 2025 is to make sure the economy grows fast, and it’ll grow faster with lower spending, especially public spending.”

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South Korean and European firms lead the inward investment raceSouth Korean and European companies have led the foreign capital influx, announcing 20 and 19 projects, respectively, since last year’s big legislation. The flurry of projects comes as US allies roll out their own policies to compete with IRA subsidies that they say have created an uneven playing field.Paolo Gentiloni, the EU’s economy commissioner, told the Financial Times last month that the “pull factor of the IRA is increasing” and called on Europe to step up its response. In February, the EU announced a rival industrial plan, including subsidies to keep developers in the bloc. Meyer Burger, a Swiss solar manufacturer, announced last month it was putting its German expansion plans on hold to open a $400mn factory in Colorado to receive tax credits from the IRA.“I would be very happy if Europe arrived faster to this new reality on climate and brought more support for companies here . . . The longer it takes, the more investment will go to the US, not only from Meyer Burger but also from others,” said Gunter Erfurt, the company’s chief executive.

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A handful of Chinese companies have made investments — defying the worsening relations between Beijing and Washington — but many are too small to be included in the FT analysis. Among the largest are Gotion’s $2.4bn battery factory in Michigan and Fuyao Glass’s $300mn expansion of its automotive glass factory in Ohio. Although the IRA’s EV tax credit allows developers to source some materials overseas, imports from China do not qualify. A Republican-led congressional committee on China last month sent a letter to Ford announcing that it was investigating its technology licensing deal with Chinese battery giant CATL in its $3.5bn Michigan battery factory announced in February.Lack of skilled workers and raw material constraints are hurdlesMore than 1mn US jobs for computer scientists and engineers risk going unfilled by the end of the decade, said a July report from the Semiconductor Industry Association and Oxford Economics. Associated Builders and Contractors, a construction lobbying group, says the US faces a shortfall of 500,000 construction workers this year alone as it tries to meet demand fuelled by the new factory announcements. “There’s just so many new [plants] going out,” said Gregg Lowe, chief executive of Wolfspeed, a semiconductor manufacturer that announced a $5bn factory in North Carolina last year. “[The biggest challenge] is probably going to be the labour to build the factory . . . then the second challenge is once you build the factory, you got to fit it out with tools, and lead times for semiconductor tools have definitely stretched out.”Long lead times for construction, technological advances abroad and tight supplies for raw materials will also hinder development of supply chains. A recent BloombergNEF report warned that new US solar cell factories could become “functionally obsolete” in the next five years due to long timelines for construction and new developments in Asia. S&P Global Commodity Insights said on Tuesday that the US would struggle to meet demand for critical minerals such as nickel by relying on domestic sources and free-trade partners — a condition to secure IRA tax credits.

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This means east Asia is likely to keep its grip on global cleantech and semiconductor supplies this decade, analysts say.The International Energy Agency expects China to control more than 60 per cent of the global supply chain for wind, batteries and solar by 2030. Benchmark Mineral Intelligence expects China will have more than double the battery manufacturing capacity of the US and Europe combined by the end of the decade.Even if the US achieves self-sufficiency in battery cell and solar module production by 2025, it will still depend on imports for parts including anodes and cathodes for batteries and polysilicon for solar modules, predicts research firm Rystad Energy. “The two largest economies are going to need each other to some extent,” said Andrés Gluski, chief executive of AES, one of the world’s largest utility developers. “A total rupture of trade does not make sense — it also would not be in the benefit of fighting climate change globally.”Are you aware of any new IRA or Chips Act projects in your area? Let us know: [email protected] More

SINGAPORE (Reuters) – The yen languished near its weakest level in nine months on Wednesday and kept traders on alert for any signs of intervention, while mounting concerns over China’s sputtering economy and gloomy outlook soured the mood in Asia.The offshore yuan struggled to break away from a nine-month low hit in the previous session, having slid to that level after a slew of Chinese data on Tuesday undershot forecasts, and prompted Beijing to deliver unexpected cuts to its key policy rates.It was last little changed at 7.3240 per dollar.The China gloom saw the Australian and New Zealand dollars, often used as liquid proxies for the yuan, tumbling to their lowest levels since November in early Asia trade.The Aussie bottomed at $0.6440, while the kiwi slid to a low of $0.5939, ahead of a rate decision by the Reserve Bank of New Zealand later on Wednesday.”The People’s Bank of China has led the way in delivering what little easing has materialised thus far, but much more needs to be done,” said Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon (NYSE:BK) Investment Management.”Pressure is now piling up on policymakers to act sooner, and in a bigger way. The weakening trend in Chinese activity is not entirely unexpected. But surprises to the downside, even amidst a downbeat consensus, places the onus on policy makers to walk the talk.”Elsewhere, a sliding yen also kept traders on the lookout for any intervention from Japan, with the currency having crossed the closely-watched 145 per dollar level for four sessions now, a zone which triggered heavy dollar selling by Japanese authorities in September and October of last year.Policymakers have not been as vociferous as they have been last year in their rhetoric against defending a weakening yen, with Finance Minister Shunichi Suzuki saying on Tuesday that authorities are not targeting absolute currency levels for intervention.”If we get up towards 150, I think it becomes increasingly likely (for an intervention),” said Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY). “But where we are at the moment, I think the jawboning will continue but I’m not convinced that we’ll see intervention.”In the broader currency market, the dollar was on the front foot after U.S. retail sales surpassed expectations in July, underscoring the economic resilience and strengthening the case for the Federal Reserve to keep rates higher for longer.That sent the benchmark 10-year U.S. Treasury yield jumping to its highest since October at 4.2740% on Tuesday. It last stood at 4.2110%.The two-year Treasury yield similarly rose to an over one-month peak of 5.0240% in the previous session and was last at 4.9437%.The greenback predictably rode Treasury yields higher, with the dollar index ekeing out a slight gain to 103.22.The euro was little changed at $1.0902, while sterling dipped 0.05% to $1.2696, ahead of UK inflation data due later on Wednesday. More