US Dollar: Bond market supports cautious consolidation – ING
ING’s Francesco Pesole notes the Dollar is drawing support from the US bond market as long-dated yields stabilise, while US-Canada trade tensions and Iran-related sanctions risks complicate the outlook.
ING's Francesco Pesole highlights that the US dollar finds support from the US bond market as long-dated yields stabilize. He points out that ongoing US-China trade tensions and Iran-related sanctions risks create complications in the outlook, with renewed US-China trade frictions potentially harming the dollar. The balance of risks for the dollar is seen as predominantly downside, but the base case is for further consolidation ahead of the Jackson Hole risk event later in the week.
CNBC reported that the Treasury might utilize its account at the Federal Reserve to finance buyback operations for long-dated debt, but rates experts argue that the difference between bill issuance and running down the Treasury General Account (TGA) is minor.
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