US 10-year yields rise above 2.90%
Don’t look now but 10-year yields are closing in on 3% once again. It was the rise in yields and fears about borrowing costs that contributed to the market volatility starting in late January.
I would be shocked if a rise above 3% didn’t cause more jitters, although maybe not to the same degree.
The other angle for FX traders is the spread of Treasuries over bunds and government bonds elsewhere. As it widens, it makes the US dollar far more attractive. That correlation hasn’t borne out, in part because of some skews in the swaps market but eventually it will.
Oftentimes, it’s not so much a question of rather having the dollar or euro, but getting 2.90% in 10-year Treasuries versus 0.58% in bunds.