Convera weekly FX report flags dominant dollar as Treasury yields climb to multi-decade highs
TLT•Convera flagged a surging dollar alongside multi-decade Treasury yields, Brent above $103 and equities near record highs. It identified US CPI as the key trigger for currency and rate expectations.
1. Dollar and yields
Convera said dollar strength persisted to fresh 18-month highs, supported by Treasury yields, risk fragility, US exceptionalism and elevated term premia. It noted that equities were near record highs despite multi-decade Treasury yields, while Brent was above $103 and geopolitical risk was rising.
2. Rates and currencies
Fed minutes kept another rate hike in play, with markets pricing a 20% chance of a hike this month and one fully priced by year-end. French fiscal worries pushed the OAT-Bund spread near 150 basis points, pressuring the euro to its lowest level since May 2025.
3. CPI in focus
Convera identified US CPI as the key trigger, saying an upside surprise could reinforce rate-hike bets, while a downside surprise could prompt profit-taking.
