Daily digest market movers: DXY remains neutral ahead of CPI data, minor reports didn’t trigger movements
- The National Federation of Independent Business's (NFIB) reported a decline in small business optimism, largely because of inflation and labor market worries. Despite a strong jobs report in March, there's a suggestion that austerity in monetary policies could lead to a rise in unemployment rates if sustained.
- Federal Reserve (Fed) officials seem to have tempered their hawkish tone, indicating a potentially dovish or neutral stance on monetary policy. The markets factor in diminished possibilities of a rate cut, with the chances of a June cut dropping to almost 50%, and a July cut below 90%. Both rates are seen as the lowest since last October.
- US Treasury yields are undergoing a decline. Specifically, the 2-year yield declined to 4.74%, while yields at 5-year and 10-year tenures traded at 4.37% and 4.36%, respectively.
- CPI data will likely fuel volatility in the bond market and on the expectations of the next Fed decisions.
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