Markets:
- Gold up $30 to $2772
- US 10-year yields down 1.4 bps to 2.26%
- WTI crude oil down 13-cents to $67.25
- Bitcoin up 4%, nears record
- S&P 500 up 0.2%
- GBP leads, AUD lags
The early US session maintained some of the recent themes with Treasury yields climbing to new highs, including 10s up to 4.34% with an associated climb in USD/JPY to 153.86 at the high. The euro also fell as low as 1.0770.
But the dollar strength slowly unwound. Part of that was a softer JOLTS report, including the lowest quits rate since 2015 (excluding the pandemic). The headline was also soft but was possibly impacted by hurricanes. That report outweighed consumer confidence, which posted a surprise jump.
The heavier fall in the dollar came after a strong 7-year Treasury auction. That was enough to spark some dip buying that saw 10s fall 7 bps from the highs and dragged the dollar back close to unchanged on the day.
The commodity currencies were underperformers after a Reuters report leaked 10 trillion yuan in China stimulus. That’s about the number analysts were looking for but the devil was in the details as it’s spread out over 3 years and with the majority earmarked for cleaning up local government debt and nearly all of the remainder dedicated to buying vacant properties.
That contributed to a 1% fall in US-listed Chinese ETFs and weighed on the Australian dollar.
Just outside of the FX complex, there is clearly a bid for non-monetary assets with gold surging to another all-time high and bitcoin gaining more than 5% before fading as it approached March’s all-time high. Those will be notable spots to watch on Wednesday as the market readies for ADP employment and US GDP.