US Dollar Higher, US Treasuries Lower

Posted by: : Paul EbelingPosted on: March 2, 2015 US Dollar Higher, US Treasuries Lower
 

US Dollar Higher, US Treasuries Lower

The US Dollar (.DXY) gained against every other major currency except for the EUR, despite releases of weaker than expected US economic data

  • EUR/USD: -4 pips (-0.4%) to 1.1193. The EU’s Manufacturing PMI for February came under expectations at 54.1 (past 53.1)
  • USD/JPY: +47 pip (+0.39%) to 120.10. It is now 174 pips away from a fresh 7-yr high
  • GBP/USD fell 68 pips (-0.44%) to 1.5372, despite an upside surprise from the UK’s Manufacturing PMI for February (Actual 54.1, past 53.1)
  • Commodity currencies, Kiwi, Aussie, and Loonie all fell against the Buck.
    • AUD/USD: -38 pips (-0.50%) to $0.7774
    • NZD/USD: -46 pips (-0.61%) to $0.7514
    • USD/CAD: +19 pips (+0.15%) to 1.2535
  • The Chinese RMB Yuan hit a 2-yr low overnight, as the People’s Bank of China (PBOC) reduced its benchmark interest rate by 25 bpts to 5.35%

The US Treasury Complex

US Treasuries finished deep in the Red

  • A wave of selling hit the US Treasury market between 9:30 and 11:30 EsT. The selling was focused in the 10-yr Note and 30-yr Bond, but 2’s and 5’s took significant losses as well. Rallies were minimal to nonexistent, as the market afford short-sellers few entry points and little relief to longs
    • 2’s/10’s rose 5 bpts to 143 bps
    • 5’s/30’s rose 1 bp to 110 bps
  • Yield Check:
    • 2-yr: +3 bps to 0.65%
    • 5-yr: +7 bps to 1.57%
    • 10-yr: +8 bps to 2.08%
    • 30-yr: +8 bps to 2.68%
  • The US economic data released Monday was weaker than expected
    • Economic data
      • February ISM: Actual 52.9, consensus 53.0, January ISM 53.5
      • January Personal Income: Actual 0.3%, consensus 0.4%, prior 0.3%
        • The lack of demand is surprising given the increase in income and declines in prices. The personal savings rate increased to 5.5% in January from 5.0% in December
      • PCE prices fell 0.5% and core PCE prices, which exclude food and energy, rose just 0.1%
      • January Personal Spending: Actual -0.2% (consensus -0.1%, prior -0.3%)
      • January Construction Spending: Actual -1.1%, consensus 0.2%, prior 0.8% revised from 0.4%

Stay tuned…

HeffX-LTN

Paul Ebeling

 

 

 

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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