US 10s daily
US 10-year yields traded as low as 4.22% after non-farm payrolls but have rebounded to 4.32%.
It’s tough to say what’s driven the reversal but here is a stab at it:
- Non-farm payrolls was skewed by the hurricanes and strikes and the market thinks the jobs maket is good
- ISM prices paid made a surprising jump, highlighting upside inflation risks
- The election is coming, though odds have shifted towards Harris in the past week, Trump is still favored and a red sweep would lead to big deficits
- A number of economic reports have highlighted uncertain business and consumer spending ahead of the election, the market could be sensing strength once the uncertainty is lifted
- Amazon earnings underscored a strong consumer
- It’s a new month and there are selling flows, perhaps from abroad
With the rebound in yields, the dollar is back near the highs of the day, including USD/JPY, which is up 120 pips from the non-farm payrolls lows.
USD/JPY 10 mins