The bond market has been rather tentative in trading this week
Despite the unrelenting dollar strength over the past few days, bonds have not really conformed to that view with 10-year Treasury yields sitting below 1.50% still today.
The next key catalyst for a move will come from the NFP release but will it really change the picture all too much? I doubt so.
There is a good argument that a strong report will see yields tick higher but with the lack of appetite shown this week, I’m still on the fence if the release later will be a turning point for the bond market.
Don’t get me wrong. The turn will come eventually and yields should rise as the Fed looks towards tapering and shift towards raising rates either in 2022 or 2023.
That will make shorting the yen rather attractive from a structural perspective but the technical side of things is still looking rather iffy for now with regards to Treasury yields.