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The dollar collapsed following the yield on US government bonds

Schedule euro / dollar at intervals of 15 minutes

The 10-year US Treasury yield fell below the 100-day MA on Wednesday for the first time since October, despite expected inflation growth and additional data due Thursday morning. The 10-year Treasury yield fell 5.4 basis points to 1.474% at 9:40 am ET. The yield on the 30-year Treasury bond fell 5.6 basis points to 2.153%. Profitability moves inversely with prices. One basis point is 0.01%.


“Everyone is looking for an explanation,” said George Gonsalves, head of macro strategy at MUFG. “This should cover short positions. I think at the same time we are experiencing a rethinking of the story of inflation … We are experiencing a peak of activity, a peak of inflation, and the markets must look to the future. “


The consumer price index for May will be published on Thursday. Economists expect the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI rose 4.2% year on year, the fastest growth since 2008.

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Investors are watching inflation data closely, fearing that this could prompt the Federal Reserve to cut asset purchases sooner rather than later, despite the central bank arguing that high price pressures would be temporary. Job openings hit a new all-time high of 9.3 million in April, according to the Labor Department’s vacancy and turnover survey released on Tuesday. Markets were expecting 8.18 million jobs, according to FactSet.

Negotiations on a comprehensive infrastructure bill fell through on Tuesday after President Joe Biden and a small group of GOP senators were unable to reach a compromise. Biden then spoke to a bipartisan group of senators working on an infrastructure spending plan.

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Euro rallies amid cross-buying after comments by EU Maros Sefkovic and falling Treasury yields. EUR / USD climbs 0.3% to 1.2217 ahead of the ECB meeting on Thursday; a large option of 1.2200 (1.1 billion euros) and 1.2250 (1.7 billion euros) could slow growth; the pair broke the June 3 high at 1.2214. EUR / GBP climbed 0.4% to a weekly high of 0.8631; 0.8655 is 100-DMA.

The Canadian dollar strengthened against its US counterpart on Wednesday as oil prices rallied and US bond yields hit their lowest level in a month. The decision on the interest rate from the Bank of Canada will shape its further dynamics. The price of oil, one of Canada’s main export commodities, is rising amid signs of strong fuel demand in Western economies and the dying prospect of a return for Iranian supplies. US oil prices rose 0.4% to hit $ 70.36 a barrel, while the Canadian dollar traded 0.4% higher to hit 1.2067. against the US dollar, or 82.85 US cents. The Canadian dollar hit a six-year high of 1.2007 last week, underpinned by sharp increases in commodity prices and a tougher stance from the Bank of Canada.

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Pound fell 0.1% to $ 1.4140, shedding earlier gains after the European Union warned it could impose trade tariffs on the UK if it does not fully comply with the Northern Ireland portion of the Brexit deal. GBP / USD is posting a second day of losses after hitting a high of 1.4189 in London hours. The pound also met options-related offer near daily highs, says a European trader; the last move shows that intraday players are getting a stop out.

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