Dollar Rallies on Higher T-note Yields

The dollar index (DXY00) increased on Tuesday by +0.55 %. The dollar got support as T-Note increased for 10 years +5 BP and the T-Bond return for 30 years increased from 5 % for the first time in 1.5 months. Support the high treasury revenue difference in the interest rate in dollars.

On Tuesday, the CPI report created some favorable primary media coverage, as the Core Core report, which was +0.2 % m/m, was just less than +0.3 %. However, there were some scattered signs of bullish pressure from the definitions, and this pressure is expected to increase in the coming months. Also, the main CPI and CPI reports increased yearly from May.

Specifically, the US consumer price index increased in June +0.3 %/m, which was in line with the market expectations, while the general number of 2.7 % was slightly worse than +2.6 % expectations and was an increase from May +2.4 %. The consumer price index increased in June +0.2 % M/M, which was slightly better than +0.3 % expectations. On an annual basis, the US consumer price index was in line with expectations by +2.9 % on an annual basis but rose from May +2.8 %.

The consumer price index report did not change the expectations to reduce the federal reserve rate at its meeting in July, but it led to a decrease in expectations for the reduction of the Federal Reserve in its meeting by 57 % compared to 65 % before the consumer price index report. Federal Futures are currently based on 3-29 % reducing opportunities in the July 29-30 meeting and 57 % at the next meeting from 16 to 17 September.

There was some positive commercial news on Tuesday after Treasury Secretary Besent said that commercial talks between the United States of China are in a “very good place”, which reduced the safe demand for the dollar. He also said that the deadline for the United States and China was flexible and told the market participants “don’t worry about August 12.” Mr. Bessent confirmed that the Trump administration has told NVIDIA that the license for the sale of advanced GPU chips to Chinese companies will be granted “all part of the mosaic” in the US -Chinese negotiations. He also said he hoped to meet the Chinese Deputy Prime Minister who was in Living in August.

There was also some positive commercial news after President Trump said that his administration had reached a trade agreement with Indonesia. However, American imports from Indonesia, which total about $ 2.8 billion, will face a 19 % American tariff, which is likely to raise the price that American consumers pay against Indonesian goods.