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US Dollar Index and Bonds Are Lower Early on June 6

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US Dollar Index

After closing the last week unchanged, the US Dollar Index started this week on a weaker note and declined in the first two trading days. Carrying forward the weakness, the US Dollar Index opened Wednesday on a weaker note. The US Dollar Index was trading with weakness at two-week low price levels in the early hours.

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Market sentiment

The euro rose to ten-day high price levels, which was boosted by hawkish comments from ECB (European Central Bank) officials. The higher euro weighed on the US Dollar Index in the early hours on Wednesday. Peter Praet, the ECB’s chief economist, commented today that the ECB is confident that the inflation numbers are moving towards the target. The ECB will discuss the gradual unwinding of bond purchases. The expectations about halting the quantitative easing program by the end of 2018 rose after Praet’s comments and boosted the euro in the early hours. The higher euro weighed on the US Dollar Index, which measures the value of the US dollar compared to the euro, yen, pound, franc, Canadian dollar, and krona.

The market is looking forward to US non-farm productivity, trade balance, and unit labor costs data. The data are scheduled to be released at 8:30 AM EST today. At 6:00 AM EST on June 6, the US Dollar Index was trading at 93.69—a drop of 0.22%.

US Treasury yields

US Treasury yields declined on Tuesday as political jitters in Italy offset the release of strong US economic data. On Wednesday, the improved sentiment amid the release of strong services PMI and job openings data took the shine out of bonds and supported the yields in the early hours. The yields move opposite to the bonds.

Below are the movements in Treasury yields as of 6:10 AM EST on June 6.

  • The ten-year Treasury yield was trading at 2.948—a gain of ~0.99%.
  • The 30-year Treasury yield was trading at 3.099—a gain of ~0.79%.
  • The five-year Treasury yield was trading at 2.787—a gain of ~0.98%.
  • The two-year Treasury yield was trading at 2.508—a gain of ~0.64%.

The iShares 20+ Year Treasury Bond (TLT) gained 0.23%, while the ProShares UltraShort 20+ Year Treasury (TBT) and the ProShares UltraPro Short 20+ Year Treasury (TTT) fell 0.64% and 1.1%, respectively, on Tuesday.

Next, we’ll discuss how commodities performed in the early hours on June 6.

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