Here’s a reminder of what happened in September 2022 when US 10s hit 4% for the first time this cycle. Yields traced out a huge intraday reversal and eventually fell all the way to 3.59% in a week.
Ultimately, that proved to be a short-term move and yields reached new highs within a month but it’s a reminder of how real money can pile at big levels.
US 10s after hitting 4 per cent
Today, US 10s are down to 4.97% from a high of 5.02% and that’s reversed some of the dollar’s gains. The FX market doesn’t appear to be believing in this move in yields and gold/oil are getting bids too.