USD Pares Early Gains, As US Yields Re-Open Lower At the Back End

The first part of trade had seen the USD strengthen a touch, but impetus has waned in latest dealings. The BBDXY got to a high of 1246.44, before settling back to 1245.00/25 now. We remain very much within recent ranges from an index standpoint.

• US Cash Tsys have opened mixed post the Memorial Day holiday, with the front end higher in yield terms, 2yr to 4.58% (+2bps) but the back end is softer (10yr -4bps to 3.76%). June T-bill yields have dropped amid optimism around the weekend's debt deal. On balance, the weaker yield backdrop has likely trimmed USD gains.
• US equity futures remain positive, but haven't shown a strong trend in the first part of trade.
• Early AUD and NZD weakness has reversed somewhat. AUD/USD touched a low sub 0.6530, but we now sit back closer to 0.6540, no change for the session. NZD/USD touched 0.6043, but is now back to 0.6055. Earlier building permits data in NZ (-2.6%) didn't impact sentiment.
• USD/JPY is back sub 140.40, likely aided at the margins by a slightly better than expected Apr jobless rate figure.
• EUR/USD got close to the 1.0700 level, but we now sit back at 1.0715/20.
• Still to come is AU building approvals, but this traditionally not a market mover.