⚖️💵Dollar Trading In Line With Rate Spreads: Cable FX Macro

• U.S. Treasury yields continue to rise on Thursday session, 2-year yields are set to climb higher for 10th consecutive day, last at 4.4398%. The cumulative move translates into a 43 basis points rise month-to-date

• Our own measure of front-end dollar rate spreads is extending higher on Thursday, meanwhile, the dollar is trading in line with the more attractive yields

• The swaps market is adding rate hike bets on Thursday, the 6-month tenor is up by 1.6bps implying a 5.272%. 2s10s flatten by 2.5bps on the day to -66.585bps, the U.S. Treasury curve inverts the most since March, preceding the banking crisis

• Despite the recent parallel trading, the <.RDDXY> and the <.RDDXYIR> hold a short-term correlation coefficient of 20%, this is compared to a 72% seen back in February