US 10-year yields threaten the top of the August range

Why are rates moving up on a soft jobs report?

The bond market is the driving force in markets today as the counter-intuitive selloff following non-farm payrolls is continuing. The August high of 1.379% is just over one basis point away after breaking through the 200-dma at 1.333%.

The thinking in the bond market is that the Fed had risked tightening prematurely and snuffing out both a recovery and inflation prematurely. The softer jobs print gives them a reason to wait and that might extend the timeline beyond when bottleneck-induced pricing starts to fade.

Adding to the upside is additional supply, with the Treasury selling $38 billion in 10-year notes tomorrow.

So far the rise in rates is lifting the US dollar as USD/JPY, GBP/USD and USD/CAD trade very close to session extremes.

Aside from the US-centric view, I'm beginning to wonder if worries about China and the 'common prosperity' plan are at work.

Invest in yourself. See our forex education hub.


September 08, 2021 at 12:33AM
Adam Button
https://ift.tt/3kZVW2m