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US Dollar Flexes Strength; Oil Prices Weaken Over Supply Concerns
Published June 5, 2018
The US dollar is nearing 6-month highs this morning as rising bond yields continue to push the greenback higher; the correlation between short dated US bond yields (2 years) strengthened to its highest level since January of this year as investors continue to tactically shift from fixed income towards equities.
US stocks are pointing to a higher open this morning as positive sentiment over tech stocks continues to strengthen overall risk sentiment. Apple’s value moved closer to a $1 trillion market cap after shares hit record highs on positive investor feedback from the company’s developer conference.
The US Dollar Index (DXY), a measure of the US dollar against a basket of currencies, stood strong at 94.04 this morning; last week the DXY rose to 95.02, marking the highest level for this indicator since November 2017.
Canadian labour productivity showed a negative reading of -0.3 percent versus expectations of a positive reading of 0.3 percent; investors will look for a positive reading on US ISM Non-Manufacturing Purchasing Managers Index and another data release on US job numbers for further confirmation of US economic growth.
Oil prices moved lower this morning over concerns of rising US oil production and additional worries that OPEC could announce an output increase at their next meeting in Vienna on June 22. Investors will look to data on US stockpiles for a better gauge on overall demand sentiment for oil products.