US Dollar Index: Rate cut doubts support greenback – Deutsche Bank
Deutsche Bank’s Jim Reid and team note that risk appetite improved, but rate expectations turned less dovish, which is broadly supportive for the Dollar Index. They highlight that the odds of a Federal Reserve cut by June fell below 50% as core PCE returned to 3.0%, pushing US Treasury yields higher. The report also flags a soft 5-year auction as another sign of shifting US rates dynamics.
June cut odds fall below 50%
"Still, the growing optimism on the near-term outlook (and diminishing fears of mass unemployment) led to a clear risk-on move for several asset classes."
"A notable feature yesterday was that investors kept dialling back the likelihood of an H1 rate cut."
"The odds of a cut by the June meeting (the first with a new Chair) fell beneath 50% for the first time this year to end the day at 48%, suggesting more doubt about an immediate rate cut by Kevin Warsh, particularly now core PCE is back to 3.0%."
"And with investors pricing out rate cuts, that meant US Treasuries struggled across the curve."
"So the 2yr yield (+0.9bps) was up to 3.47%, whilst the 10yr yield (+2.3bps) rose to 4.05%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
70GW "Power Gap"! U.S. Power Grid, Citizens, and AI Giants—One Side Has to "Make Concessions," Massive Capital Expenditure "Cannot Be Realized"
Morgan Stanley's calculations show that even after exhausting all solutions such as nuclear energy and fuel cells, there remains a net shortfall of 43GW. What’s more challenging is that gas turbine prices have tripled, delivery times for large transformers extend up to four years, and labor shortages have locked the IT capacity deployment cap at 142GW by 2030. Meanwhile, over $156 billion in data center projects were canceled or postponed in 2023, and 70% of Americans oppose building data centers in their communities. Policy resistance is pushing massive AI capital expenditures toward the brink of being stranded.
The recovery of the global credit market has yet to find solid footing! Société Générale warns: The US midterm elections, employment data, and corporate earnings will bring a new round of challenges
Société Générale stated that investors are about to face a week filled with major political and economic events. The U.S. midterm elections on Tuesday, Friday's release of the U.S. non-farm payroll report, and a new round of corporate earnings reports could all disrupt the fragile initial recovery momentum in global credit markets.
SpaceX (SPCX.US) stock price plunges 40%, causing Musk’s net worth to shrink by $48.5 billion
Impacted by concerns over an AI bubble, SpaceX's stock price dropped to $134, causing Elon Musk to lose over $48.5 billion in a single day. Although AI revenue reached $7.56 billion, capital expenditures of $16.4 billion weighed down the valuation. Meanwhile, Tesla rose 34% against the trend due to merger expectations.
Intel (INTC.US) Faces Worst Post-Earnings Selloff in Nearly 50 Years! Major Institutions Lower Target Price, While Technical Analysts See a Buying Opportunity
On the Seeking Alpha platform, several analysts have upgraded their ratings for Intel.
Crypto prices
More
