HALISTER1: UST Rally After Soft CPI Data Could Spell Trouble for Dollar: DB

UST Rally After Soft CPI Data Could Spell Trouble for Dollar: DB

(Bloomberg) -- If the 10-year UST yield starts moving below 2.20% after Friday’s soft CPI data, it risks undermining the dollar, managing director of FX research at Deutsche Bank Alan Ruskin said in phone interview.
  • 10Y UST yield decline would especially hurt USD/JPY
  • “Each month you have some excuse for why the data is soft, but the overall impression is still that inflation pressures are remarkably contained for this point in the cycle”
    • Data “will keep the dollar broadly on the back foot”; positive for risky assets over time
  • Still “pretty good chance” Fed will hike rates in December; however, it will become more difficult if soft data trend continues; all eyes on Jackson Hole after report, especially ECB’s Draghi rhetoric
To contact the reporter on this story: Anna Windemuth in New York at awindemuth1@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Vivien Lou Chen

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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2539Z GR (European Central Bank)

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Alan Ruskin (Deutsche Bank Securities Inc)

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