Dollar Gains as Treasuries Surge
The U.S. Dollar is broadly stronger against most major currencies as yesterday’s stronger-than-anticipated preliminary Purchasing Managers’ Index numbers for the month of September have bolstered expectations that the Federal Reserve will hike interest rates again by year end.
U.S. Treasury yields also surged as a result, with the 10-year yield sitting around 5.13% and the 30-year yield hitting its highest level since 2004 at approximately 5.43%. Crude oil prices also surged overnight after Iranian officials stated the conflict in the Middle East could extend beyond the Persian Gulf and the Red Sea and into the Indian Ocean, offsetting any benefit derived from Saudi Arabia ramping up oil shipments. Brent Crude is trading over $105 per barrel. On the U.S. data front, we will receive Initial Jobless Claims for the week ending September 19th at 8:30am, which are expected to come in at 200k.
What to Watch This Week…
- Fed Meeting and Presser on Wednesday 2PM
- Bank of Japan Decision on Friday
- USA Online is always open
The complete Economic Calendar can be found here.
CHF
The Swiss Franc is down against the Dollar after the Swiss National Bank elected to keep their key interest rate on hold at 0.0% early this morning. The rate decision itself was widely anticipated, but the driving force behind price action is the commentary that accompanied the decision. Some Traders were expecting a hawkish tilt from the SNB given some depreciation in the Franc as of late, but the SNB softened language regarding its willingness to intervene in foreign exchange markets to defend the currency, which Traders took as the collapse of a key support pillar.
NOK
The Norwegian Krone is down against the Dollar despite the Norges Bank decision to hike interest rate by 25 bps to 4.5% early this morning. The decision was relatively unexpected, with economists split on the prospect of a move going into the meeting. More importantly, Norges Bank signaled a willingness to hike rates further before the end of the year should inflation considerations support it.