uploads/2018/05/Yields-3.png

US Dollar Retreats, Bond Yields Gain Early on May 22

By

Updated

US Dollar Index

Following a strong performance last week, the US Dollar Index started this week on a mixed note by trading with increased volatility on Monday. On May 22, the US Dollar Index started on a mixed note and traded with weakness in the early hours.

Article continues below advertisement

Market sentiment

The market sentiment was strong on the US Dollar Index last week amid rising US bond yields. The US Dollar Index surged early on Monday. The US-China trade war concerns subsided and added momentum to the US Dollar Index. However, the US Dollar Index declined as the day progressed on Monday amid profit-booking due to US Treasury yields pulling back. Extended profit-booking ahead of Wednesday’s FOMC meeting minutes is weighing on the US Dollar Index in the early hours on May 22.

At 5:30 AM EST on May 22, the US Dollar Index was trading at 93.40—a drop of 0.3%.

US Treasury yields

After gaining for two consecutive trading weeks, US Treasury yields started this week on a mixed note by pulling back on Monday. The Treasury yields regained strength on Tuesday and were stable in the early hours. The market is looking forward to the auction of four-week and 52-week bills. The auction is scheduled for 11:30 AM EST today.

Below are the movements in Treasury yields as of 5:35 AM EST on May 22.

  • The ten-year Treasury yield was trading at 3.069—a rise of ~0.13%.
  • The 30-year Treasury yield was trading at 3.203—a fall of ~0.09%.
  • The five-year Treasury yield was trading at 2.909—a rise of ~0.37%.
  • The two-year Treasury yield was trading at 2.578—a rise of ~0.33%.

The iShares 20+ Year Treasury Bond (TLT) and the ProShares UltraShort 20+ Year Treasury (TBT) gained 0.05% and 0.03%, respectively, while the ProShares UltraPro Short 20+ Year Treasury (TTT) declined 0.1% on Monday.

Next, we’ll discuss how commodities performed in the early hours on May 22.

Advertisement

More From Market Realist