USD fails to break 200DMA, yields pull back
The US dollar failed to break above the 200-day moving average (DMA) yesterday, despite strong US retail sales data. This is what is known as a “news failure,” and it is often seen as a sign of weakness in the currency. Treasury yields also pulled back yesterday, breaking below the 4.2% level.
This could be a sign that investors are becoming less concerned about inflation, and it could open up opportunities for long positions in assets like gold and equities.
Equities remain under pressure, GBP and NZD outperform
Equities remained under pressure yesterday, as investors continued to focus on rising Treasury yields. The S&P 500 closed down 0.3%, and the Nasdaq Composite fell 0.7%.
However, the GBP and NZD outperformed other currencies, with the GBP rising 0.5% and the NZD gaining 0.7%. This was likely due to the Bank of England and the Reserve Bank of New Zealand both raising their interest rates yesterday.
Light economic calendar, housing data in focus
Today’s economic calendar is light, with only US building permits and housing starts scheduled for release.
However, these data will be closely watched by markets, as they will provide an update on the state of the US housing market. If the data shows that the housing market is slowing down, it could add to the pressure on the USD and yields.
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