US Greenback Jumps Up as Treasury Yields Leap on Fed Expectations. The place To From Right here?

US Greenback, Treasury Yields, Fed, USD/JPY, ASX 200, NIKKEI 225, CSI 300 – Speaking Factors

  • US Dollar positive factors traction because the market eyes the Fed’s mountaineering timeline
  • APAC equities had been blended, with China particular information weighing the CSI 300
  • USD/JPY broke key resistance.Wailing the US Greenback index (DXY) do the identical?

The US Greenback continued larger in Asia at this time after kicking off the brand new yr with a robust rally from the open in New York.

It was underpinned by US Treasury yields, with the benchmark 10-year bond leaping from 1.5% to commerce above 1.63%. Expectations of additional hikes from the Federal Reserve fuelled the surge in rates of interest throughout the curve.

Whereas danger sentiment was optimistic, the expansion and commodity linked currencies of AUD, CAD, NOK and NZD all received hit within the North American session however have managed to recuperate some floor at this time.

The yield delicate USD/JPY made a 4-year excessive, breaking above the November peak of 115.52. Gold and silver had been pummelled within the US Greenback melee, however crude oil was regular for probably the most half, buying and selling above USD 76 a barrel.

Australia’s ASX 200 and Japan’s Nikkei 225 went larger at this time, following on from a optimistic begin to the yr from Wall Street in a single day. Each bourses had been up over 1.8% through the day.

Going within the different route, Hong Kong and Chinese language mainland indices had been decrease because the Peoples Financial institution of China (PBOC) didn’t add as a lot liquidity as anticipated.

Moreover, the renewable sector was rattled by a Chinese language authoritiesannouncement that they are going to be eradicating the subsidy for brand new power autos after 2023.

The benchmark CSI 300 was down over 1.3% at one stage however managed to claw again a number of the losses in afternoon commerce.

Within the US later at this time, the ISM manufacturing survey is due for launch in addition to the Canadian manufacturing PMI.

US Greenback index (DXY) Technical Evaluation

The US Greenback index (DXY) rejected a transfer towards the latest low of 95.517 and this stage might proceed to offer assist.

An ascending trendline that at present intersects slightly below 95.00 may additionally present assist, in addition to the pivot level at 94.561 or earlier lows at 93.278 and 91.947.

The 0.58% rally within the US session has seen it bump towards the 21-day simple moving average (SMA) and a decisive break above it may see close to time period bullish momentum evolve.

Potential resistance might lie on the latest highs of 96.906 and 96.938.

Regardless of the numerous transfer, volatility stays subdued, as proven by the relative narrowness of the 21-day SMA primarily based Bollinger Band.


Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the feedback part beneath or @DanMcCathyFX on Twitter

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