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:
The non-farm payroll report was skewed by the hurricanes and strikes and the market thinks the jobs maket is goodISM prices paid made a surprising jump, highlighting upside inflation risksThe 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 deficitsA 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 liftedAmazon earnings underscored a strong consumerIt’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.
This article was written by Adam Button at www.forexlive.com.
