The dollar index sat at approximately 99.325. The euro was trading at $1.1621 while sterling held at $1.3320, neither gaining meaningful ground against the greenback.
Meanwhile, Brent crude futures climbed over 1% to above $110 per barrel. The catalyst: escalating tensions in the Middle East, particularly concerns about potential disruptions to shipping through the Strait of Hormuz. That narrow waterway handles roughly a fifth of the world’s oil supply on any given day.
On the bond side, US Treasury yields pushed higher as prices fell. The 10-year yield rose to around 4.631%, while the 2-year yield reached approximately 4.102%.
CME FedWatch data now shows over a 50% probability of a Fed rate hike by December. Rising energy costs and sticky inflation are rewriting the script that the Fed’s hiking cycle was finished.
Analysts at Barclays have noted that conditions for risk assets and bonds are deteriorating simultaneously. They described the current setup as ripe for continued dollar strength.
