Treasury Yields Hit 16-year Highs – 10-year above 4.6%
Global financial markets continued in the same vein for a sixth straight day after last week’s Fed meeting. The major US indices fared better than the last few days, the Dow closing down 0.2% with the S&P flat and the Nasdaq finishing up 0.22%. US treasury yields pushed higher once again as investors continued to adjust positions in light of a more hawkish Fed, the benchmark 10-year trading above 4.6%, the highest level since 2007 and the dollar pushed to 10-month highs. Oil prices, whose rise has hugely increased inflation concerns, took another step higher as falling US crude stockpiles drove WTI above $93/b with the global benchmark Brent now trading above $95/b again. Gold suffered as the greenback moved higher trading down 3.85% over the last week.
US Dollar Hits 10-month High – Up 0.42%
The dollar pushed higher yesterday to hit fresh 10-month highs as markets continued to adjust to higher for longer rates in the US. Currency traders have been waiting patiently for interest rate differentials to kick in and it seems that last week’s Fed meeting has been the signal for a change of heart in the market in a big way. Major currencies are now well on the back foot against the greenback as traders continue to look for levels to buy the dollar as we enter the sixth day of consecutive gains. The Euro hit a 9-month low at 1.0486 last night, Cable traded down to its lowest level since March and USDJPY topped out within touching distance of the key psych level at 150.00.
More Data Ahead for Traders Today
Markets are moving nicely for trend traders at the moment but there are some key risk events that could cause a few road bumps ahead today. Early in the day, the focus will be once again on the antipodes as Australian Retail Sales numbers are released. The European session sees some crucial inflation numbers with both the German and Spanish Prelim CPI numbers due for release. The New York Day opens with the release of the US Final quarterly GDP number as well as the usual weekly unemployment claims data but the main focus will come towards the end of the session when Fed Chair Jerome Powell speaks (publicly!) for the first time since last weeks FOMC rate update.
