All eyes are on bonds today as US 10-year yields back away from 5%.
They reached 4.995% early in US trading but couldn’t break through and have been strongly bid since, driving yields to 4.91%.
US 10y yields, 5 mins
The drop in yields runs right across the curve and could reflect a bid for safety ahead of a potential Gaza invasion, short covering or investors seeking higher safe yields than they’ve had in 15 years.
In any case, the drop in yields is dollar negative and positive for equities, though the reaction in those markets so far has been tepid.