The USD index extended gains to November 2022 highs around 107.20 before retreating marginally
US stocks finished mixed on Monday even as legislators announced an agreement to avert a government shutdown. The bill keeps the government open through mid-November. The Dow declined 0.22%, the S&P 500 closed up just 0.01%, and the Nasdaq Composite added 0.67% to notch its fourth consecutive positive session. Gains were capped by rising bond yields, with the yield on the 10-year Treasury marking fresh highest level since October 2007.
In Asia, equities slid on Tuesday after indecisive deals on Wall Street. Hong Kong’s Hang Seng dropped more than 3% amid a sell-off in property shares. At the same time, China Evergrande rallied aggressively, resuming trading after its shares were suspended last week. As a reminder, the real estate developer announced that its chairman was under investigation. Japan’s Nikkei 225 index fell 1.83%, while Australia’s S&P/ASX 200 skidded 1.28%. Markets in mainland China and South Korea remained closed for holidays.
European stocks opened lower to start the day, with investor mood remaining subdued for now. The Stoxx 600 was down 0.25% as most sectors were in negative territory in early deals. It looks like regional investors continue to digest fresh economic data out of the Eurozone that revealed a strong downturn in manufacturing output, while new orders fell by a near-record level. US stock index futures are flat on the day so far. Treasury yields continue to hold higher, suggesting stocks could struggle to stage a sustained bounce during the upcoming session.
In currency markets, the dollar stays underpinned for now after yesterday’s rally. Earlier in the session, the USD index extended gains to November 2022 highs around 107.20 before retreating marginally. Should risk demand remain subdued in the near term, the safe-haven dollar may see more gains despite the overbought conditions. Now, the DXY is to hold above the 107.00 figure in order to confirm the latest breakout.