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US 10-year Treasury yields broke above the 3% psychological level for the first time in seven years, triggering a flight from risk assets and a broad dollar rally. Latin American currencies, including the Brazilian real and Mexican peso, each lost over 2% during the week.
A stronger dollar and weaker emerging market currencies make US feed commodity exports more expensive for Brazilian and Mexican buyers, which can weigh on US export demand and prices.
ebury.comEnrique Díaz-ÁlvarezMay 20, 2018After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 301 past bullish macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The US 10-year yield breaking above 3% triggered a broad dollar rally and a flight from risk, with Latin American currencies including the real losing over 2% in the week; it was published after the window but describes in-window dynamics.
