Greenback Recommences, Yields Decline, Pound Under Pressure

Market Reviews

The greenback has risen, but falling treasury yields slow it down. WTI crude oil hit the minimum of 42.75 but then closed at 43.5. DOW and S&P 500 have weakened -0.29% and -0.67%. Nikkei dropped -0.48%. 30 year yield fell -0.053 and settled at 2.735. 10 year yield reduced -0.037. Yellow metal is still soft. Charles Evans (Chicago Fed President) claimed that it’s hard to decide whether to raise rate again this year since the inflation figures are rather disturbing. He added that September wouldn’t be a good time for such a move, that’s why it would be better to wait until December. Fed fund futures are pricing in 13.1% odds for the September’s rate hike. The Sterling is trading as the softest currency of this week as Theresa May decided to create a coalition with North Ireland's Democratic Unionist Party. But, parties haven’t reached any consensus yet. Also, more than 50 Labours signed a joint statement against hard Brexit.

30 year yield retreated from 38.2% retracement of 2.102 to 3.201 at 2.781 and stopped at 3.735. TYX tried to defend the key resistance of 3.255 twice, but it didn’t manage to and now it’s heading towards 61.8% retracement at 2.52 and maybe lower. 10 year yield is holding under 2.229 resistance. USD index broke 97.77 resistance and trend reversal is so far unlikely.

Benoît Cœuré (ECB executive board member) stated that in order to maintain financial stability Euro clearing should shift from London to EU after Brexit. Mark Carney answered that this wouldn’t be in anyone’s economic interest. Australia Westpac leading index increased 0.0% mom in prior month. Japan all industry index lifted 2.1% mom in April. Britain will announce public sector borrowing. The United States will publish existing home sales.