Just when you think that the bond market may be set for a bit of a breather at some point last week, we’re seeing yields shoot higher again today. 10-year Treasury yields are now at their highest since December 2018 as the rout intensifies, gradually inching closer to the 3% level. The move continues to underpin the dollar in light trading, while keeping the yen pinned down.
Here’s a look at US yields today:
2-year yields +4.9 bps to 2.494%
5-year yields +6.3 bps to 2.823%
10-year yields +5.8 bps to 2.866%
30-year yields +2.5 bps to 2.942%
In turn, it is also turning the screws in bond markets elsewhere around the globe. Of note, 10-year JGB yields continue to hover close to the implicit cap of 0.25% and that is keeping the pressure on the BOJ to defend that.
As Treasury yields jump up, the dollar is holding firmer across the board amid a more defensive risk mood as well. EUR/USD is down slightly just below 1.0800 with USD/JPY holding 0.2% up at 126.65. Meanwhile, AUD/USD and NZD/USD are both down 0.6% to 0.7354 and 0.6727 respectively now.
Going back to yields, this chart continues to be one to watch this month as 10-year Treasury yields threaten a push above its 200-month moving average on the way towards the 3% mark:
Did anyone hear a pop of a bubble?