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The value of the dollar decreased towards a three-year low on Monday, causing US government bonds to face pressure. This was due to weak manufacturing data and concerns over the sustainability of the country’s debt burden, which unsettled investors.
The dollar dropped by 0.7% against a basket of its trading partners, nearing the three-year low it reached after President Donald Trump’s tariff policies in April. The S&P 500 index also saw a decline following a weaker-than-expected ISM survey for May, which came in at 48.5, below the expansion/contraction threshold of 50. However, the index managed to recover slightly and ended the session 0.4% higher.
Experts like Gordon Shannon from TwentyFour Asset Management noted that the ISM data hinted at the impact of tariff uncertainty on US growth. Francesco Pesole, a forex strategist at ING, mentioned that the survey added to the existing weak dollar momentum, exacerbated by soft demand for US Treasuries and escalating trade tensions.
The yield on 30-year US government bonds increased by 0.03 percentage points to 4.97% as the bond prices dropped. Treasury Secretary Scott Bessent’s reassurance that the US would not default came amidst concerns over debt sustainability, with JPMorgan Chase CEO Jamie Dimon warning about the potential vulnerabilities of the US bond market.
The ISM survey reflected ongoing challenges in the US economy, attributed to the impact of the trade war. The survey also indicated delays in deliveries, with supply managers struggling to source goods efficiently.
In addition, imports decreased sharply, and producers started depleting their inventories built up prior to the new trade levies. Economists cautioned that this temporary shield of stockpiling would not be sufficient to offset rising import costs in the long run.

Following Trump’s announcement of increased tariffs on steel and aluminium imports, US metals prices rose. Aluminium prices surged, and steel futures on Comex experienced a moderate increase in trading. Shares of US steel producers Nucor and Steel Dynamics also climbed in response to the news.