US Yields Stabilize After Falling To Three-Month Lows

Overview: The 10-year US Treasury yield steadied after reaching a three-month low near 1.43%, despite the US CPI rising more than expected to 5% year-over-year. On the week, the decline of around a dozen basis points would be the largest in a year. Australia, New Zealand, and Italy benchmark yields have seen a bigger decline this week. The S&P 500 see new record highs yesterday, but the spillover effect has been muted. Japanese and Chinese stocks eased today, though most other markets rose. On the week, Thailand and the Philippines did best in the region. Europe's Dow Jones Stoxx 600 is setting a new record high, but the driver is the decline in interest rates, and the rate-sensitive utility sector is leading the advance. Finance and real estate are not participating today as the benchmark closes in on its fourth weekly gain.US futures are narrowly mixed. The foreign exchange market is quiet. The greenback is mostly a little firmer, though the Australian and Canadian dollars are showing a bit of resilience. Among emerging market currencies, the Turkish lira continues to recover. Its 1% gain today brings the weekly rise to over 4%. The JP Morgan Emerging Market Currency Index is up for the fifth time in six sessions. Barring a reversal, it will be the third consecutive weekly advance. Gold has pushed back after poking above $1900, and July WTI is hovering above $70 a barrel. Other industrial commodities are firm. The CRB Index closed at new six-year highs yesterday.  

Asia Pacific

Beijing has taken several initiatives in recent weeks on commodities, the yuan, and crypto. It is stepping up its efforts to rein in commodity prices. Two new efforts on commodities have been announced. First, base metals from official reserves, including copper, aluminum, and zinc, will be made available directly to end-users. Second, steel mills in Tangshan have been ordered to restrict output (effective June 10-June 15) to combat pollution. Iron ore and steel rebar futures rallied in China today for the third consecutive session.  

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Read more by Marc on his site Marc to Market.

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