Stretched levels going into the year’s 2nd half
July 1, 2025
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-Dollar index new low this morning at 96.40, well below the level from which the Fed initially started its hiking campaign in 2022. $/yen has broken a support trendline in place since April’s low of 139.89 (which is essentially a double bottom from the Sept 2024 low of 139.58). Now 142.86. Gold has been in sdieways consolidation since May but is up 50 this morning with GCQ5 3358.
–US bonds making new highs. TYU5 currently 112-09+ vs yesterday settle 112-04. In the two weeks since June 16, 10y yield has fallen from 4.45% to this morning’s 4.196, essentially delivering one 25 bp ease since the June 18 FOMC (where the Fed passed on a cut). Over the same period, June 16 to present, 30y yield has fallen from 4.96 to this morning’s 4.74, and SFRZ6 has run 30 bps from 9668 to this morning’s 9698.5. ESU5 has galloped 1000 points since late April, from just over 5200 to this morning’s 6242. All levels which feel somewhat stretched going into the year’s second half, but of course, that doesn’t mean they can’t keep going given a backdrop of USD liquidity.
–This morning brings ISM Mfg expected 48.8 from 48.5 last and JOLTS expected 7300 from last at 7391. Lowest level of this cycle has been 7103 from last September; the high was 12134 on March 2022. In the 2 years prior to COVID, 2018 and 2019, JOLTs averaged around 7200.
