Yields

Sentiment remains fragile following the big sell-off on Thursday

As a result of the high correlation with USD/JPY, yields have been pulling USD/JPY higher with them.

As bond yields move inversely to bond prices, it should be taken note of that the US 10-year note has just tested a key level of support.

U.S. yields have surged higher again this week to their highest level since May 2019, after Fed Chair Powell opened the door to a 50bp rate hike at the next FOMC meeting, causing fresh pain for global bond markets.

In Powell’s first comments since the press conference after the FOMC meeting last week, he comes across as extremely hawkish.

After a surge to 7% YoY for December, CPI is expected to have increase to 7.3% YoY in January.

Benchmark US government bond prices have been inching higher and yields lower again, suggesting the recent improvement in US data has not made a big impact on interest rate expectations.

Following a sharp sell-off last Thursday, gold prices have since stabilised.

The race to the bottom continues for government bond yields after the Reserve Bank of New Zealand became the latest major central bank to shift from neutral to dovish overnight.

With US treasury yields starting to turn lower, just as the S&P500 hesitate at critical highs, we take a look at the bigger picture to see if sentiment could be about to turn for the worst.

With the Fed dropping its hawkish bias, and with recent US data deteriorating slightly, bond prices should remain supported and yields undermined going forward

Thanks to a pullback in bond yields and an equity market sell-off, yesterday saw gold climbed to its best level since July to reach a critical resistance level around $1238-40.

When stocks fall, the conventional wisdom is that safe haven gold would rise, and vice versa. But when stocks fall because of rising bond yields, it is a different story.