Oil advanced 0.3% to US$104.8/barrel after rising above US$106/barrel whilst gold trimmed gains after rallying to as much as US$1446/ounce, an all-time high. Ten-year Treasury note yields slid five basis points to 3.51%.
Oil prices set the tone for equity markets yet again as crude futures hit new 2-½-year highs on concerns that a protracted civil war is brewing in Libya. Sentiment wasn’t helped by a rating cut for the semiconductor sector while a sovereign debt downgrade in Europe was a subtle reminder that this brushed-under-the-carpet issue simply refuses to go away.
Investors outside the U.S. have boosted their holdings of longer-maturity Treasuries to the highest level since the credit markets froze in 2008, helping curb rising yields amid concern inflation is accelerating. International buyers held 90% of their US$4.44tr of U.S. government debt in notes and bonds as of December, the same as in September 2008 when Lehman Brothers Holdings Inc. collapsed. The ratio fell to 83% in October 2009 as investors sought the safety of Treasury bills with the U.S. economic recovery still in question.
Daily Dow Jones: Range Bound Trading Ahead
Source: StockCharts.com
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