Treasury Yields Fall, Dollar Weakens As Manufacturing Activity Gauge Contracts More Than Expected
Portfolio Pulse from Piero Cingari
U.S. manufacturing activity contracted more than expected in May, leading to a decline in Treasury yields and a weakening of the U.S. dollar. The iShares 20+ Year Treasury Bond ETF (TLT) rallied by 0.9%, while the Invesco DB USD Index Bullish Fund ETF (UUP) fell by 0.4%. Traders increased their bets on a September rate cut.
June 03, 2024 | 3:50 pm
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POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) rallied by 0.9% as Treasury yields fell due to weaker-than-expected manufacturing activity.
The decline in Treasury yields directly benefits long-term bond ETFs like TLT, leading to a short-term price increase.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) fell by 0.4% as the U.S. dollar weakened against peers due to declining Treasury yields.
The weakening of the U.S. dollar, driven by falling Treasury yields, negatively impacts the UUP ETF, leading to a short-term price decrease.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80