Economist's Insights

Today’s Trading Activity – Treasury Bull Flattening Continues as Stocks, Dollar Weaken

Jun 6, 2017

Early morning trends held to Tuesday’s close with stocks falling between 0.3% and the Treasury curve flattening on lower yields. The energy sector was the bright spot within the S&P as crude prices gained. However, an industry report showing U.S. crude inventories likely contracted for a ninth consecutive week also reported a significant build in stocks of gasoline. Oil prices trimmed their daily gains after the report was released. Consumer discretionary companies led the declines as retailers dropped more than 1%. The Treasury curve flattened on lower yields but finished off of intraday extremes. The 10-year yield grabbed a 2.12% handle just before 6:30 a.m. CT, representing the lowest mark since the Thursday after the U.S. presidential election (November 10). By the close, the 10-year yield had settled at 2.145% which was the lowest since the Wednesday following the election. The 2-year yield fell 0.8 bps to 1.29%. The spread between the 2s and 10s continues to shrink, a trend that began in earnest in mid-March. The spread settled at 0.847%, the lowest since October 3. The Dollar dropped also fell to its weakest level since October 5.