Dollar slips as oil prices sink, bond yields stabilise
SPY•The dollar index fell 0.2% to 102.39 as Brent crude dropped 1.4% to $105.20 and the 10-year Treasury yield declined 5 basis points to 5.192%. Markets turned their attention to Wednesday’s US CPI report.
1. Dollar and yields ease
The dollar retreated in Asian trading, while the euro and yen each gained 0.2% against it. The 10-year Treasury yield was down 5 basis points at 5.192% as bond trading resumed after a US holiday.
2. Oil prices fall
Brent crude futures fell 1.4% to $105.20 as traders weighed the prospect of increased diesel supplies from Russia. Supply risks remained in focus after attacks on energy infrastructure in Ukraine and recent attacks on Saudi Arabia.
3. CPI in focus
Investors awaited Wednesday’s US CPI report, which analysts expect to reinforce expectations for further monetary tightening. Fed funds futures indicated an 80.6% probability that the Federal Reserve would hold rates at its next meeting, down from 82.3% on Friday.
