NEW YORK (Reuters) – The U.S. 10-year Treasury yield hit a three-year high above 2.7% on Friday while the U.S. dollar index posted its biggest weekly percentage gain in a month, buoyed by the prospect of a stronger Federal Reserve. Reserve tightening.
On Wall Street, the S&P 500 and Nasdaq ended lower in choppy trade as investors assessed the economic outlook as the Federal Reserve moved to fight inflation. Read more
The release of the minutes of the Fed’s March meeting this week showed that “many” officials were ready to raise interest rates by 50 basis points in the coming months. Read more
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The dollar index advanced to 100 for the first time in nearly two years. It rose to 100.19, the highest since May 2020. Last little change on the day was at 99.822, up 1.3% on the week.
With the dollar’s rally in recent weeks, the euro has come under pressure due to a tightening electoral race in France, the eurozone’s second-largest economy, between President Emmanuel Macron and far-right candidate Marine Le Pen. Macron is still ahead in the polls.
The euro fell for the seventh consecutive session to a one-month low of $1.0837. It was last traded at $1.0853, down 0.3% from the day. Read more
“The dollar’s latest rally is the culmination of bullish factors ranging from geopolitical risks, election uncertainty in France, and the Fed’s increasingly hawkish outlook on interest rates,” said Joe Manimbo, chief market analyst at Western Union Business Solutions in Washington. Read more
In Treasuries, the yield on 10-year Treasuries was 2.73%, the highest level since March 2019, and the yield on 10-year inflation-protected securities went within 15 basis points of a positive turn for the first time in more than two years.
The yield on the 10-year Treasury rose 5.2 basis points to 2.706% while the yield on the two-year Treasury rose 5.8 basis points at 2.520%, leaving a 2/10 difference at 18.41 basis points.
Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index rose 137.55 points, or 0.4%, to 34,721.12 points (.SPX) It lost 11.93 points, or 0.27%, to 4488.28 points, and the Nasdaq Composite (nineteenth) It fell 186.30 points, or 1.34%, to 13711.00 points.
Pan-European STOXX 600 Index (.stoxx) It rose 1.31% and the MSCI gauge of stocks worldwide (.MIWD00000PUS) fall 0.04%.
The risks of the French presidential election were also evident in the bond markets as French borrowing costs rose while yields of other core European government bonds fell.
In the energy market, oil prices rose 2% on the day, but recorded a second consecutive weekly decline.
International Energy Agency (IEA) member states will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March.
Brent crude futures closed up $2.20, or 2.19%, to $102.78 a barrel. US West Texas Intermediate crude futures rose $2.23 to $98.26. Read more
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Additional reporting by Gertrude Chavez-Dreyfus and Rodrigo Campos in New York. Samuel Indyk and Elizabeth Hawcroft of London; Editing by Nick McPhee, John Stonestreet, Andrea Ricci and David Gregorio
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