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GOLD

A Touch Firmer In Asia

JGBS AUCTION

PREVIEW:‌ 20-Year Supply Due

JGBS

Modest Rally, 20-Year Supply Eyed

DOLLAR
DOLLAR: Wednesday saw Bank of America Research note that "while U.S. Tsy yields
have been very stable, this masks a collapse in real rates toward 2012-13 lows
(alongside rising inflation breakevens). The weaker USD narrative has focused on
the risk rally and longer-term structural concerns, but we show the compression
of real rates (Fed easing) accounts for 65-80% of USD depreciation since March.
The relentless drop in US real rates also means the search for yield remains
paramount affecting most investor classes, particularly spread product, gold and
equities. The willingness of the Fed to compress real rates is clear - how much
further depends upon its ability especially from current levels. That said,
confirmation of a technical death cross in DXY warns of dollar weakness in the
near term."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com