DXY stages an impressive comeback from 91.396 to 91.956 and...
If there was any uncertainty about the capability of yields in terms of an overarching force, the abrupt turnaround in direction for the Greenback and broad risk sentiment should remove all uncertainty. However, the catalyst for the latest reversion to bear-steepening in US Treasuries and other global bonds is less clear-cut, as the 30 year auction was not a flop and the fact that President Biden signed off on stimulus a day earlier than initially anticipated is neither here nor there, albeit cheques and direct back account credits will arrive more promptly. Hence, the rationale may actually lie elsewhere given a sharp fall from grace in Eurozone debt after a brief PEPP boost and even more pronounced reversal in UK Gilts in wake of mostly better than forecast data and details of Q2 DMO issuance. Moreover, the Buck may be benefiting from some supportive technical factors as the DXY stages an impressive comeback from 91.396 to 91.956 and back above 91.740 that remains a key pivot on many charts. Ahead, PPI data and the first look at Michigan sentiment for March. Bullish bias is active.
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