US Treasuries Advance, US Dollar Finishes Higher

• News
  • The US trade deficit widened less than expected to 41.9-B in May from a revised $40.7-B in April, consensus estimate was -$42.5-B
  • JOLTS rose to 5.363-M in May from a downwardly revised 5.334-M in April
  • The $24-B 3-year note auction was met with soft demand:
    • High yield: 0.932%
    • Bid-to-cover: 3.16
    • Indirect bid: 47.7%
    • Direct bid: 13.9%
  • Greece is due to submit a proposal to the Eurogroup Wednesday
    • The package is said to include a short-term funding agreement and a longer-term package
    • According to reports 16 out of 18 Eurozone FM’s do not want Greece in the currency bloc

US Dollar (.DXY) Index

.DXY rose 0.62% to 96.90 Tuesday after EUR sold off on sharply lower European yields

• Fears of Grexit increased as the official creditors look opposed to debt forgiveness for Greece
• Greece owes the ECB EUR 3.5-B on 20 July
• German Industrial Production was flat M-M in May Vs expectations for growth and a 0.6% rise in April

• GBP/USD: -1.00% to 1.5448
  • Manufacturing Production in the UK  fell 0.6% M-M in May Vs a 0.4% decline April. The report missed expectations and sent the 10-yr Gilt yield down 5 bpts
• USD/JPY: -0.22% to 122.36
• USD/CHF: +0.55% to 0.9476
  • The Swiss unemployment rate for June matched expectations and the prior reading at 3.3%
• USD/CAD: +0.70% to 1.2741
• AUD/USD: -0.79% to 0.7430
  • The Reserve Bank of Australia (RBA) held its cash rate steady at 2.00%
  • Governor Stevens said that the Aussie had more room to fall against a broad basket of currencies, despite its depreciation against the Buck.
• NZD/USD: -0.34% to 0.6651

Stay tuned…

HeffX-LTN

Paul Ebeling