US Dollar and Bonds Are Weak in the Early Hours


Jun. 4 2018, Updated 8:33 a.m. ET

US Dollar Index

Last week, the US Dollar Index closed flat and broke the two-week gaining streak. The strong rebound on Friday helped the US Dollar Index close the week without losses. However, the US Dollar Index opened Monday on a mixed note and was trading with weakness at ten-day low price levels in the early hours.

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Market sentiment

The US Dollar Index surged at the end of last week amid a recovery in US Treasury yields. The release of stronger-than-expected US non-farm payrolls data also supported the US dollar. According to the Bureau of Labor Statistics, the US non-farm payrolls were 223,000 in May—better than the forecast of 189,000. The US Dollar Index lost momentum in the early hours on Monday amid consistent uncertainty about US-China trade relations amid a lack of official statements following Sunday’s trade talks. The decreased demand for safe-haven assets, like the US Dollar Index, amid improved geopolitical concerns took the shine out of the US Dollar Index. The market is looking forward to the release of April’s factory orders data. The data are scheduled to be released at 10:00 AM EST today.

At 5:30 AM EST on June 4, the US Dollar Index was trading at 93.80—a drop of 0.43%.

US Treasury yields

US Treasury yields moved higher at the end of last week amid the improved political scene in Italy and strong US jobs data. Decreased caution in the markets is weighing on US bonds and supporting the yields in the early hours on Monday. The yields move opposite to bond movements.

Below are the movements in Treasury yields as of 5:40 AM EST on June 4.

  • The ten-year Treasury yield was trading at 2.922—a gain of ~0.94%.
  • The 30-year Treasury yield was trading at 3.067—a gain of ~0.66%.
  • The five-year Treasury yield was trading at 2.770—a gain of ~1.1%.
  • The two-year Treasury yield was trading at 2.492—a gain of ~0.96%.

The iShares 20+ Year Treasury Bond (TLT) declined 0.53%, while the ProShares UltraShort 20+ Year Treasury (TBT) and the ProShares UltraPro Short 20+ Year Treasury (TTT) gained 1.1% and 1.6%, respectively, on Friday.

Next, we’ll discuss how commodities performed in the early hours on June 4.


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