The U.S. dollar eased on Thursday but if it holds its ground on Friday, at a minimum, it will chalk up its 12th weekly rise in a row. That would be a record winning streak, according to Reuters data.
On the subject of historic runs, the U.S. two-year/10-year yield curve steepened for a ninth straight day on Thursday, something not seen since at least 2012. The rise in long-dated yields has been the biggest driver of volatility and stress that have been behind the recent selloff in stocks.
But one source of relief this week has been oil prices. Crude fell another 2% on Thursday, following Wednesday’s 5.5% slump – the biggest fall in a year.
All else equal, lower energy prices cools inflationary pressures and lessens central banks’ need to tighten policy. The prospect of easier policy than previously anticipated should in turn boost investor sentiment and risk appetite.
After threatening to test $100 a barrel last month, oil has slumped almost 15% peak-to-trough in the last five days, and its year-on-year price is once again negative. That is, from a policy point of view, disinflationary.
