Aurelia Butler

The Treasury said it was trimming issuance, but by smaller increments than in previous quarters, based on projected borrowing needs that include recent strong tax receipts and potential redemptions of Treasury securities by the Federal Reserve. The Treasury said additional reductions may also be necessary, depending on developments in its projected borrowing needs. The U.S. government had increased auction sizes in 2020 to pay for coronavirus-related spending. The Treasury said it expects to cut the size of 2-, 3- and 5-year note auctions by $1 billion each per month over the coming quarter, while 7-year auctions will be cut by $2 billion per month in the same period.New and reopened 10-year note and 30-year bond auctions will also be reduced by $1 billion, while the 20-year bond auctions will be cut by $2 billion.The Treasury also said it expects to maintain the size of its May reopening auction of 10-year Treasury Inflation-Protected Securities (TIPS) at $14 billion. It will increase the size of the June five-year TIPS reopening auction by $1 billion to $18 billion and increase the July 10-year TIPS new issue auction by $1 billion to $17 billion. The Treasury said it will sell $45 billion in three-year notes, $36 billion in 10-year notes and $22 billion in 30-year bonds next week.The U.S. Treasury said on Monday it expects to pay down $26 billion in debt the second quarter, down from a January borrowing estimate of $66 billion, primarily because of an increase in receipts. The second-quarter estimate assumes an end-of-June cash balance of $800 billion. More

Government bonds were under pressure on Wednesday as traders braced for the US Federal Reserve to raise interest rates aggressively and central banks worldwide moved to tighten monetary policy to battle inflation. Australia’s 10-year bond yield rose more than 0.2 percentage points to as much as 3.57 per cent. The nation’s central bank on Tuesday lifted its main interest rate by a larger than expected 0.25 per cent — its first such move in more than a decade.Germany’s 10-year Bund yield touched 1.03 per cent in early European trading, before settling back to 0.967 per cent, after European Central Bank policymaker Isabel Schnabel told German publication Handelsblatt that a July rate rise was “possible.” Bond yields move inversely to their prices and can rise when expectations of higher rates on cash make the instruments’ fixed income payments less appealing. “Australia started the gun on a week where we have more important central bank meetings,” said Brooks Macdonald chief investment officer Edward Park, referring to the Fed’s impending decision as well as an anticipated Bank of England rate rise on Thursday. “It was a firm reminder that bond markets can be caught off guard.” The Reserve Bank of India on Wednesday announced a 0.4 percentage point rate rise — the first change in more than two years, sending the nation’s 10-year bond yield 0.25 percentage points higher to 7.4 per cent as the price of the debt fell significantly.Meanwhile, Italy’s equivalent bond yield added 0.07 percentage points to 2.92 per cent, having touched 2.95 per cent earlier in the session, levels not seen since early 2020, following Schnabel’s remarks. Later on Wednesday the US central bank is expected to announce its first 0.5 percentage point rate rise since 2000. Futures markets are pricing half-point rises at the Fed’s subsequent meetings in June, July and September. The annual pace of consumer price inflation in the US hit 8.5 per cent in March, as energy and food costs surged in response to Russia’s invasion of Ukraine. Eurozone inflation is running at a record high of 7.5 per cent. Analysts expect the Fed to also formalise how it will shrink its $9tn balance sheet, which ballooned during the coronavirus crisis as the central bank bought bonds at unprecedented rates, suppressing debt yields and increasing investors’ appetite for speculative assets. In April, as speculation built about the world’s most influential central bank rapidly reversing its pandemic-era support, Wall Street’s technology-heavy Nasdaq Composite share index dropped 13.3 per cent. “There are some quite hawkish expectations for the Fed, including concerns in the market that they may open the door to 75 basis point [0.75 per cent] rate rises in the future,” said Cosimo Marasciulo, head of fixed income absolute return at fund manager Amundi.The yield on the 10-year US Treasury note, a marker used by investors worldwide to value financial assets, traded steadily at 2.96 per cent after topping 3 per cent earlier this week, its highest since late 2018. In equities, Europe’s regional Stoxx 600 index fell 0.5 per cent after Brussels proposed a ban on Russian oil imports, sending the price of Brent crude 4.1 per cent higher to $109.34 a barrel. London’s FTSE 100 fell 0.4 per cent.Futures trading implied Wall Street’s S&P 500 would rise 0.4 per cent and the tech-heavy Nasdaq 100 would add 0.3 per cent. More

As a result, the company will need to pass on price increases to its customers, citing already-high energy and raw materials costs that have only been exacerbated by the effects of the war in Ukraine.”The burden on our result is growing considerably due to steep increases in the cost of energy, raw materials and logistics,” Bosch’s finance chief Markus Forschner said. The cost pressure is particularly high in Bosch’s core Mobility Solutions division, with steel prices three times higher than in 2020 and unlikely to change soon.While Bosch increased sales in its core Mobility Solution business by 7.6% last year, to 45.3 billion euros, it generated an operating return of only 0.7%, after posting a loss the previous year. “It’s not just automakers that have to pass on price increases, but especially suppliers such as us as well.”The head of the Mobility Solutions division, Markus Heyn, said talks on price increases have been going on for a long time and that he was confident Bosch could reach agreement with the customer side. Thanks to price increases and favourable exchange rates, the Bosch Group expects sales growth of more than 6% for the current year, after sales of almost 79 billion euros ($83.14 billion) in 2021, and a return on sales for 2022 of 3-4%. ($1 = 0.9502 euros) More