The 10-year Treasury yields managed to breach the psychological barrier of 3% on Tuesday for the first time since January 2014. US stock indices ended the day in the red as some companies warned that material cost increases and tepid demand may weigh on profits as the year goes on.
The dollar continued to trade higher against most of the other G10 currencies on Tuesday. It underperformed only against EUR and GBP, while it ended the day virtually unchanged against CAD and SEK. The greenback gained the most against NOK, AUD and NZD.
It’s all about the yields once again. Yesterday, the 10-year Treasury yields managed to breach the psychological barrier of 3% for the first time since January 2014, touching a high of 3.009 during the Asian morning Tuesday. As we noted yesterday, the catalyst behind the latest yield rally could be concerns over inflationary pressures from rising oil prices, and/or worries over the growing US debt supply.
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