US Dollar Up, US Treasuries Up

Posted by: : Paul EbelingPosted on: March 10, 2015 US Dollar Up, US Treasuries Up
 

US Dollar Up, US Treasuries Up

The US Dollar (.DXY) rose against every other major except for JPY Tuesday, as negative yields in Europe prompted investors to sell the Euro for USDs, and commodity prices declined

  • EUR/USD fell 123 pips or 1.13% to 1.0720 to its lowest mark since Y 2003
    • The yield on Germany’s 10-yr Bund fell 9 bpts to 0.19%, leading fixed-income investors to seek yield elsewhere
  • $/Yen traded a 7-yr high at 122.01, before fading and falling 32 pips (-0.26%) to 121.11
  • Cable fell only 16 pips (-0.1%) to 1.5089
  • The commodity currencies
    • AUD/USD fell 60 pips (-0.78%) to 0.7625
    • NZD/USD declined 69 pips (-0.94%) to 0.7271
    • USD/CAD rose 37 pips (0.29%) to 1.2661

US Treasury Complex

  • The US Treasury complex rose Tuesday to pre-February employment report levels, as US equity losses and declining yields in Europe encouraged participants to seek safety and yield in US government issues.
  • The curve flattened with 2’s/10’s down 6 bpts to 144 bpts and 5’s/30’s fell 4 bpts to 111 bpts
  • Yield
    • 2-yr: -1 bpt to 0.68%
    • 5-yr: -4 bpts to 1.61%
    • 10-yr: -7 bpts to 2.12%
    • 30-yr: -8 bpts to 2.72%
  • The ECB’s QE program had not been properly priced into European sovereign yields, and even yields in France and Germany have fallen dramatically over the past 2days. Tuesday, French and German 10-year notes were down 8 and 9 bpts respectively
    • Negative nominal yields prevail in all German debt maturities up to 7 yrs
  • January US Wholesale Inventories came in ahead of expectations (Actual 0.3%, consensus -0.1%, prior 0.0%), did not temper demand for US Treasuries
  • The $24-B 3-yr Note auction was met with good demand. The high yield was 1.104%, the bid-to-cover ratio was 3.33, and the indirect bid was 51.4%

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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