Monday saw the New Zealand dollar perform strongly among major currencies, while the Japanese yen was the weakest. The US dollar ends the day with mixed results, with gains against the Japanese yen and the Canadian dollar, and declines against the Australian and New Zealand dollars. The greenback was little changed against the euro, the British pound, the Swiss franc and the Canadian dollar.
The New York Consumer Survey showed that inflation expectations were flat one year out over five years, but over three years they fell by -0.6% to an all-time low in the survey (going back to 2013) of 2.3%. It was strange, but the results helped support stocks and boost Treasuries.
Yields fell 3.0-4.5 basis points across the curve.
The other news event focused on speculation that Iran and Hezbollah would retaliate against Israel for the killing of a senior Hezbollah official late last month, just hours after the killing of Ismail Haniyeh, Hamas’s political leader and the movement’s face in ceasefire negotiations with Israel. Iran blamed Israel and vowed revenge.
Oil prices were supported by a brief move above $80 before supply mixed. The current price is trading at $79.60.
This news could also help boost Treasury bond prices on safety flows.
US stocks were not particularly affected by geopolitical tensions.
At the end of the day, the Dow Jones Industrial Average fell -0.36%, the S&P remained almost flat, and the Nasdaq rose 0.21%.
US PPI data will be released tomorrow at 8:30 AM, CPI data will be released on Wednesday and retail sales on Thursday.
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