Tighter for longer. No, that’s not someone admitting losing the waistline battle. That is the Fed’s most recent guidance on its rate policy. Economic data releases for the U.S. continue to come in above expectations, boxing in FOMC officials who have simultaneously ruled out (1) further rate hikes and (2) foreseeable future rate cuts.
Yesterday’s weekly jobless claims were 215k (220k estimate), erasing the 232k print two weeks ago which was seen as a possible first crack in the robust U.S. labor market. And Manufacturing, Services, and Composite PMI (producer inflation) released yesterday were higher than forecast in all categories.
Today’s Durable Goods Orders for April were +0.7%, opposite the direction of the -0.8% estimate.
The dollar is broadly lower today, down the most in the Scandinavian pairings: -0.85% vs. NOK, -0.53% vs. SEK, -0.35% vs. DKK. Other dollar losses include -0.35% vs. EUR, -0.24% vs. GBP, -0.22% vs. CAD, -0.21% vs. NZD, and -0.18% vs. AUD.
U.S. Treasury yields are climbing as traders adjust holdings to better align with Fed guidance, driving treasury prices lower. The 10-year yield is 4.494%, its highest in two weeks.
Gold traded to a low of $2,326.79 yesterday, a 5% reversal from Monday’s $2,449.89 record high.
Oil prices reached $76.15/barrel today, the lowest in three months and a 13.14% decline from its most recent peak at $87.67/barrel on April 12th.
