We got four US economic indicators today and they were all stronger than expected:
- US new home sales 685K vs 500K expected
- US September consumer confidence 108.0 vs 104.5 expected
- Richmond Fed manufacturing index for September 0 vs. -8 last month
- Capital goods orders non-defense ex-air +1.3% vs +0.2% expected
The strength in the data is certainly notable for Federal Reserve officials and will encourage them to keep raising rates and not offer any sign of a pivot. In turn, we've seen what had been declining US Treasury yields today turn to a rise. US 2s are up 1 bps to 4.31% now from a low of 4.20%. Further out the curve, US 10s are up 9 bps to 3.97% from a low of 3.80%. Watch the 4% level.
With that the US dollar has rallied and US equities have pared gains. Keep a close eye on USD/JPY, which is testing the 145.00 level again.
