Yesterday’s reversal higher in Treasury yields helped to lift the dollar but not as much as I would have expected. With a further 7 bps in US 10-year yields today, the climb has been too much to ignore.
The US dollar is at the highs of the day across the board, including a one-month high in USD/JPY — up 32 pips to 157.52.
USDJPY daily
Yields began the climb yesterday after poor auction results in 2-year and 5-year notes. There is a 7-year sale today that will be closely scrutinized.
In the big picture, Treasury yields are now above where they were before the most-recent CPI report in a sign that the market isn’t convinced that the inflation story is done, or is worried about unsustainable US deficits.
US 10 year yields
