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Money flowed out of bonds again, sending the 10-year Treasury yield higher by 4 basis points to 2.9%. The bond market continues to price in aggressive rates by the Federal Reserve this year.
Economic Data
Housing Starts rose by 0.3% in March, taking the rolling 12-month number of starts to 1.793M, above expectations for a drop to 1.745M from 1.788M in February, data released by the US Census Bureau on Tuesday showed. Meanwhile, Building Permits rose by 0.4%, taking the rolling 12-month number of permits to 1.873M, above expectations for a drop to 1.825M from 1.865M in February. The economic calendar had no other remarkable releases during the North America trading session on Tuesday.
Other Developments
The current battle by central banks worldwide to curb inflation continued to boost bond markets, where U.S. Treasury yields continued to move upward.
The Federal Reserve looks all but certain to raise its interest rate by 50 basis points when it meets next month and a 75 basis point hike has not been ruled out as Fed officials work to curtail inflation.
St. Louis Federal Reserve President James Bullard repeated his case for raising rates to 3.5% by the year-end on Monday, adding a 75 basis point hike should not be discounted, although this was not his base case.
There is growing speculation the Federal Reserve will look to ramp up the rate it is tightening its monetary policy. The benchmark 10-year Treasury yield was last at 2.9051%, down slightly after hitting its highest levels in three years.
The dollar index (DXY) rose above 101 for the first time since March 2020, as the greenback hit a 20-year high against the yen and tested a two-year peak on the euro. The index was last up 0.1% to 100.88.
Growth concerns weighed on oil markets Tuesday, reversing recent gains in the commodity amid some concerns about global supply.
Brent crude was last down 4.87% at $107.65 a barrel, while U.S. crude was last down 4.91% at $102.9 per barrel.
Gold prices were lower after coming close to reaching $2,000 an ounce during Monday’s session. Spot gold was last at $1,955.22 an ounce, down 1.17% on the day.
WTI crude oil futures fell sharply, down around 5% to $102.90 a barrel. That brought sellers into leading oil and gas producers like Comstock Resources (CRK) and SandRidge Energy (SD).
Also Read
Crude Oil Gets Lower As WTI Reverses Down
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Fed’s Bostic: Larger 75 bps hike “not on the radar”
Fed’s Evans: I don’t see the need for larger than 50 bps rate hikes
Wall Street higher on earnings hopes
USD/JPY: Pressure on the yen to wear off as the US curve inverts
USD/CAD Struggles Amid Firm US Dollar
Canadian CPI Preview: Forecasts from five major banks, inflation to breach 6%
