10-year yields are up another 2 bps today to 1.59%
We’re finally at the point where 10-year yields are on the brink of touching 1.60%, the level touted upon the technical breakout last month here.
Can the move continue to extend further to the upside?
Well, that depends a lot on what the US non-farm payrolls releases will have to offer later today but if anything, I reckon we could see some room for a breather and consolidation in between the 1.60% and 1.70% region if the jobs report is a strong one.
I would expect bond sellers to go with some profit-taking so just be wary of that, considering that the Fed is making it clear that tapering and rate hikes are two relatively distinct set of events i.e. rate hike expectations may not swell alongside better data.
It’s all about inflation still when going about how quickly the Fed may need to raise rates but in any case, improved labour market conditions are always welcome in that regard.
For now, the latest shove higher in rates over the past few sessions is keeping yen pairs perky with USD/JPY back up at 111.90 and we’re seeing a more prominent breakout in CAD/JPY while GBP/JPY and AUD/JPY are contesting key technical levels today.