The US dollar bids continue as yields rise and Fed cut pricing fades

It is a formidable day for the US greenback because the Greenback Index breaks above 100 with a broad bid. The chart right here appears to be like like one thing of an inverted head-and-shoulders sample that targets an increase to 102.00.

The market is starting to shift away from recessionary pricing and Fed cuts. A June lower continues to be excessive at 66% however that is slide at present whereas pricing for the yr forward is right down to 122 bps from 131 bps yesterday.

The yield curve is validating the transfer as properly with 2-year yields up 5 bps to three.67% from a low of three.56% earlier at present.

The greenback bids are getting assist from the tech commerce as cash piles again into the Nasdaq following sturdy earnings from Microsoft and Fb.

There’s a delicate balancing act right here as a result of tariffs are nonetheless on the market and the US and China are successfully embargoing one another. The market is pricing in a commerce struggle climb down however to what degree? And nobody actually is aware of the consequences on the actual economic system. That mentioned, you would argue that firms like MSFT and META are mainly immune.