Greenback retreats from year highs ahead of data – Global bond sales continued on Tuesday. The benchmark yield on 10-year US Treasury bonds has risen to its most substantial level since 2018, at close to 3%. It has been published since its highest daily closure in almost two years. However, on Wednesday, the US dollar index turned south in Asian trading hours. The European Economic Document will present February data on industrial production and trade balance. Investors are watching Fedspeak closely as well.
Major capital indexes in the US recorded impressive gains on Tuesday. Investors shifted their focus to revenue figures. At the European session on Wednesday, US stock index futures fell 0.3% to 0.9%; This indicates a deteriorating market sentiment. The latest Ukrainian intelligence reports suggest that Russia is preparing to intensify its military aggression in eastern Ukraine in the coming days. On a positive note, the Shanghai authorities announced earlier today that the coronavirus situation had shown a downward trend in recent days.
Meanwhile, the president of the Atlanta Federation noted that the 75 basis point rate increase was not on the radar. Reflecting the same sentiment, the president of the Chicago Federation is pulling back more than 50 bps against the idea of a rate hike in future political meetings. Nevertheless, the recent weakness in the DXY is more like a technical adjustment than the beginning of a downtrend. Yields on 10-year US T-bonds remain unchanged at close to 2.95% overnight.
Data and Forecasts
EUR/USD fluctuated in the tight range on Tuesday. The rise in eurozone bond yields has helped keep the common currency resilient to competitors. The pair posted modest daily earnings of more than 1.0800 on Wednesday. On Tuesday, the GBP/USD closed the fourth trading day in a row in negative territory. However, it managed to return to 1.3050 in the European morning.
At the Asian session on Wednesday, the USD/JPY reached its highest level in almost two decades at more than 129.00; Before losing the pull and retreating to mid-128.00. The Bank of Japan announced earlier today that it would conduct an unlimited fixed-rate purchase operation for Japanese government bonds; Once the yield opened close to 0.25%. This threatens the upper capital of the central bank.
Improving market sentiment and rising US yields have led to heavy gold losses. After falling almost 1.5% on Tuesday, XAU/USD declined on Wednesday; Last Lo recorded a loss of 0.5% to $1,940. Bitcoin won 1.7% on Tuesday; it rose to $42,000 before moving into the consolidation phase close to $41,500. Ethereum managed to profit on Monday and reached a five-day high of $3,132 on Tuesday.