US yields getting hit
The chance of a 50 BP cut in September is up to 39%. It was below 5% last week. That is fueling more dollar selling, although the AUD and the GBP remains the weakest of the majors. The USD has taken earlier gains and retraced or reversed earlier gains in the NY session. The EUR and the CHF are the strongest currencies.
In the US debt market, yields are under extreme pressure with a mild flattening. The 2 year is down -12.9 bps. THe 10 year is down -10.6 bps.
Looking at the yield of the 10 year note chart below, the low has reached 1.7294%. The 1.7088% is the next target. It equals the swing low on November 9th 2016. The yield today is at the lowest level since that day.
