US Dollar Index
After closing the previous week flat with decreased momentum, the US Dollar Index started last week with positive sentiment. Fed members’ relatively hawkish tone supported the US dollar at the beginning of last week.
The US Dollar Index lost strength as the week progressed and ended the week almost flat. According to New York Fed President and FOMC member William Dudley, recent weakness in the job market is temporary. The US labor market is expected to improve in the coming months—one of the factors that helped the US dollar move up at the beginning of the week. However, the fall in oil prices weighed on the US Dollar Index. Weaker-than-expected US economic data also weighed on the US Dollar Index. According to the Department of Labor, US initial jobless claims rose by 3,000 and reached 241,000—higher than the expectation of 240,000. The market is looking forward to economic releases scheduled this week, especially US GDP data scheduled to release on June 29.
US Treasury yields
Last week, US Treasury yields started on a stronger note. Yields moved lower as the week progressed amid doubts about a gradual increase in interest rates. The lack of upbeat economic releases last week acted against Treasury yields. The market is looking forward to Fed Chair Janet Yellen’s speech at 1:00 PM EST on June 27.
Movement in Treasury yields
- The ten-year Treasury yield closed at 2.144—a fall of ~0.42%
- The 30-year Treasury yield closed at 2.715—a fall of ~2.2%
- The five-year Treasury yield closed at 1.756—a gain of ~0.69%
- The two-year Treasury yield closed at 1.345—a gain of ~2.3%
The iShares 20+ Year Treasury Bond ETF (TLT) rose 1.1%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 3.1% and 2.1%, respectively, in the week ending June 23.
In the next part, we’ll discuss how commodities performed last week.