The bond market continues to set the tone in trading this week

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The selling in Treasuries continues after the technical break last weekAnd that is continuing to underpin yen pairs in general, with USD/JPY pushing towards 111.20 ahead of European trading today - its highest since 2 July.As mentioned since last week, the technical break higher in yields is one that is tough to challenge at the moment and in the case of 10-year yields, there is a good chance of seeing the momentum carry towards 1.60% or 1.70%.Adding to the technical case is the fact that Fed confirming the taper timeline and also the growing worry about stagflation that is being brought about by the energy crisis and slowing global recovery following the summer.While the Fed maintains that inflation is transitory, the latter makes it tough for them to keep such a stance especially if price pressures continue to run hot through to next year.If anything else, it just feels like they don't want to spook markets too quickly at this point. Taper for now. Hik
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