Another strong USD day in the markets with USD index trading at levels last seen in Nov 2022 and Asian session today morning pushing the USD higher. Yields on the USTs surged with US10s trading a high of 4.70% fueled by economic resilience as the ISM Manufacturing number printed 49.0 (exp 47.8) with the employment index at 51.20 (exp 48.30) and it averted the Government shutdown through the passage of a stop gap funding bill. Atlanta Fed GDPNow 3Q growth estimate was unchanged at 4.90%.
Comments from Fed members:
Michael Barr - likely at or very near a sufficiently restrictive level
Loretta Mester - One more rate hike and then hold them at higher levels for sometime
Michelle Bowman - multiple hikes may be needed
The move in USD index looks secular. Play the trend and don't try to call a top unless you see a catalyst for reversal.
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