Treasury Yield Hits 5-Year High

Wednesday’s economic
provided the markets with a spark as the Core CPI rose more than

Stock index futures responded immediately by moving from firmly positive to
negative, before recovering just before the opening bell.

Later in the day the Fed’s Beige Book showed signs of deceleration (report).

The bond prices responded by falling sharply, pushing yields higher across the
board. The yield on the 2-yr T-note hit a five-year high and is back above both
the 5-yr and 10-yr yield. Fed Funds futures are pricing in at least two more
interest rate hikes of 25bps by the Federal Reserve.

The US Dollar Index sold off after the CPI data was released but recovered to
close well above the session low. The Dollar closed lower against all the majors
except for the AUD and CAD.

The EIA reported Crude Oil inventories rose, while Gasoline inventories fell in
the most recent week (report).
Crude Oil futures closed slightly higher at $69.14. Natural Gas prices jumped
sharply higher.

Gold closed slightly lower but well above session lows.

The softs were mixed, Cocoa +1.35% and Lumber -1.75% were the biggest winners
and losers.

All the grains closed lower, with Corn -2.57%, Wheat -2.30% and Soybeans -1.05%.

Economic News

CPI Up 0.4% For May; Core CPI Up 0.3% (report)

CPI Up 4.2% From Last Year; Core CPI Up 2.4% From Last Year

EIA – Crude Inventories Down 0.9 Mln. Barrels; Gasoline Inventories Up 2.8 Mln.
Barrels (report)

Beige Book Shows Some Signs Of Deceleration (report)

For more reports and analysis go to our

Ashton Dorkins

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