The dollar continues to march north amid higher bond yields
US stocks finished slightly higher after choppy session on Thursday as the rally continued to abate. The S&P 500 rose 0.23%, while the Nasdaq inched 0.21% higher and the Dow Jones Industrial Average added less than 0.1%. Yesterday’s gains have brought the Dow and S&P 500 into positive territory for the week while the Nasdaq is down more than 0.5% since Monday so far. On the data front, existing home sales fell 5.9% last month compared to June, highlighting a drag from higher borrowing costs.
Asian stock markets were mixed on Friday, with the MSCI Inc.’s Asia-Pacific share index shedding 0.4%. Japan’s Nikkei 225 finished less than 0.1% lower while South Korean Kospi fell 0.60% as well as China’s Shanghai Composite. On the data front, Japan’s July headline inflation rose to 2.6% from 2.4% in June, exceeding expectations of 2.2% and higher than the Bank of Japan’s goal of 2.0%.
In Europe, equities were lower at the open amid the persisting global uncertainty. The DAX 30 index gave up 0.62% after the data showed that German producer prices surged last month by 5.3% as prices rose significantly for intermediate goods while the sharp rise in electricity prices has also contributed to the headline figure. US stock index futures were in early premarket deals ahead of the weekend.
The dollar continues to march north amid higher bond yields, with 10-year Treasury yields up over 6 bps to 2.943%. The USD index surged to one-month highs around 107.70 and was last seen clinging to the upper end of the extended trading range, looking poised to extend the ascent towards the 108.00 next target. Agaibst this backdrop, EURUSD plunged to 1.0070 for the first time since mid-July, suffering deep weekly losses amid a combination of recession risks in Europe and Fed’s hawkish policy.