We’re already starting to see some notable market moves on the day ahead of European trading. I would argue the main culprit to be the bond market, after the move there yesterday. 10-year Treasury yields fell below the threshold of what might’ve resembled a short-term bottom around 3.67%. And that is continuing today, with yields down another 2 bps to 3.62%. In turn, that is triggering some broader market moves so far today.
US Treasury 10-year yields (%) daily chart
USD/JPY in particular is down 1% to 141.00, not helped by some remarks by BOJ policymaker Nakagawa earlier here. The pair remains very closely tied to action in the bond market at the moment. And while I would’ve presumed it might be a quieter week, it seems like bond traders aren’t waiting around for the Fed next week.
Besides that, we’re starting to see equities sentiment also suffer a bit after the gains overnight. S&P 500 futures are now down 0.5% with Nasdaq futures down 0.6%.
The move in the bond market is pretty much setting the tone across all other asset classes at the moment.