Today’s Trading Activity – Another Good Day for Equities adds to Early-Morning Pressure for Treasury Yields
Jul 13, 2017
The Dow gained (+0.1%) for a third consecutive day and closed at a new record high for the second time this week. The S&P and Nasdaq both added 0.2% but fell short of notching a new record. Treasury yields rose 2.0 bps and 2.7 bps at the 2- and 10-year parts of the curve, respectively, as sovereign debt extended an early morning sell-off. Sovereign yields came under (upward) pressure after a pre-market report in the WSJ indicated the ECB may announce tapering of its QE program at its September meeting. This follows recent indications that the ECB may be turning less dovish on monetary policy. The Euro, however, failed to rally on the report and weakened for a second day against the Dollar after reaching its strongest level against the greenback in 14 months on Tuesday.