The US dollar is sporting a softer profile against most of the major and emerging market currencies. The Japanese yen is the main exception. The greenback is rising against the yen for the fourth session and the sixth of the past seven. The dollar’s gains against the yen coincide with the 10-12 bp recovery in the US 10-year yields over the past ten sessions. 

The latest uptick in US yields, with the 10-year yield trying to re-establish a foothold above 2.30%, may have been spurred by the strong reiteration by the US Treasury Secretary that extra-long maturity is being analyzed. Mnuchin has been saying this for some time, but yesterday’s comments seemed to be a strengthening of the likelihood that a 50-year bond will be issued. Reports have suggested that primary dealers are less enthusiastic and are concerned about liquidity and costs. Mnuchin is more interested in the appeal of locking in low rates longer. Other countries, including Canada, France, Switzerland, and the UK have issued 50-year bonds.The US did to fund the Panama Canal over a century ago. 

At the end of March, which also marked the end of Japan’s fiscal year, the US dollar reached a high of JPY112.20.  Today it is edged through there. The JPY112.15 area also corresponds with the 38.2% retracement of the dollar’s decline since the high near JPY118.60 on January 3. The trend line connecting that January high and the March 10 high near JPY115.50 comes in now near JPY113.10.There is a large (~$1.1 bln) option struck that JPY111.80 that expires today.  

The eurozone manufacturing PMI ticked down to 56.7 from 56.8 flash reading and56.2 in March. It is a new multi-year high, helped by employment and order backlog. The French and German readings were unchanged from the flash estimate. It’s reading of 56.2 was a little above expectations and above March’s 55.7.It is also a new multi-year high.Spain’s manufacturing PMI rose to 54.5 from 52.9.It snapped a two-month decline.