Treasury yields climb higher as equities also extend gains on the session
I hate to be the one to say it but the risk rally in markets over the past two hours look to be overly optimistic in my view.
US futures are up by 0.7% while European stocks are posting solid gains on the session currently. Meanwhile, Treasury yields have turned the corner with 10-year yields erasing its fall earlier to be up by 2.5 bps at 1.506% currently.
All that just because of some mildly positive - even that is a bit of a stretch - China headlines on trade earlier in the session?
I don't doubt that we could see a more positive reception from the US camp later to allow for risk trades to extend their gains seen today. However, I'd be wary as this is definitely a story that we have seen one too many times before.
The more optimistic feeling here has pushed USD/JPY to session highs above 106.30 as buyers seize near-term control now ahead of resistance around 106.30-41 currently.
It's foolhardy to try and predict or anticipate what may come next from the US or China (delay in tariffs or more tariffs, who knows?) but I don't think it's too much to say that a trade deal remains some way off still.
I reckon that may set up markets for a bit of a disappointment given the optimism we're seeing so far on the day.
