The U.S. Dollar Index has traded within a 105.75/106.50 range since closing above 106.00 on April 12th. During April the dollar index had appreciated as much as 1.89% but has retraced some of that gain, now +1.14% for the month. Significant dollar advances for the month include +2.82% vs. MXN, +2.17% vs. JPY, +1.51% vs. GBP, +1.22% vs. NOK, +0.94% vs. CAD, +0.93% vs. CHF, +0.91%vs. EUR, +0.72% vs. NZD and +0.64% vs. AUD.
Today’s PMI data release for Manufacturing, Services and Composite categories were all lower than forecast: Manufacturing was 49.9 vs. the 52.0 estimate; and Services and Composite were both 50.9 vs. 52.0 estimate. This is the first set of recent data to hint at decreasing inflation following a worrying string of data that showed consumer and producer inflation beginning to climb after plateauing earlier in the year.
U.S. Treasury yields had been positive earlier in the day but have since turned negative following the PMI inflation data. The near-term tenors are bearing the brunt of the selloff, 2yr/3yr -0.05%.
Global equities are solidly in positive territory today, cheered by the better-than-expected PMI. The Nasdaq 100 Index is leading U.S. gains, +1.34%. The S&P 500 is +0.80%.
The economic calendar for the remainder of the week includes tomorrow’s Mortgage Applications and Durable Goods Orders; Thursday’s Quarterly GDP and Initial Jobless Claims; and Friday’s Personal Income, Personal Spending and Consumer Sentiment.
