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US Treasuries Under Pressure; Oil Up on Expected Lower Inventories

Published January 10, 2018
  • 10-Year US Treasury Yields reached upwards of 2.59% in early trading this morning after China announced it may stop buying US debt. This has caused USD to be under pressure against most major currencies; a decrease in US bond purchasing would impact the country’s debt financing, which is particularly relevant given the recent passing of Trump’s tax overhaul.
  • The greenback is down more than 1% against the yen today after the Bank of Japan announced the tapering of its bond purchase program, causing speculation that Japan might start easing off the current “accommodative” monetary policy (stimulus) that is currently in place.
  • The Canadian dollar is down this morning against several major currencies (including USD), largely due to this morning’s disappointing data for New Building Permits.
  • Oil prices are up in early trading after an announcement yesterday by the American Petroleum Institute, stating crude inventories declined by over 11 million barrels versus an expected decline of 3.9 million. The US Energy Information Administration will release its report at 10:30AM EST today. The potential for increasing US shale production will, of course, continue to be a cause for concern. WTI Crude is up 0.67% to $63.38 with Brent Crude up 0.38% to $69.08 at the time of writing.