Economist's Insights

Today’s Trading – Yields Rise as Stocks Climb and the Dollar Rebounds

May 23, 2017

U.S. stocks climbed closer to their all-time highs as the Dollar recovered and the yield curve increased by two to three basis points across the curve. U.S. equities improved after strong economic data sent European exchanges higher for the day. Financials led both the S&P and Dow to daily gains of 0.2%. Energy companies were middle-of-the-pack performers as crude moved higher for a fourth consecutive session. The gains in crude prices developed even as the Dollar rebounded. OPEC will meet in Vienna on Thursday to determine if the current cuts will be extended past the current June deadline. The 2-year yields saw the smallest increase, rising 2.1 bps after a solid monthly auction. Various metrics from the auction showed solid demand. A bid-to-cover of 2.9 compared favorably to a 2.7 six-auction average. Indirect bidders took down 57.2% of the auctioned amount, down from last month’s auction but still high relative to recent years. The 10-year yield rose 2.6 bps to 2.28%.