Breakevens ease a little while Treasury yields are calmer once again
The bond rout on Tuesday has abated somewhat as 10-year Treasury yields backed away from 1.30% and 30-year yields away from 2.10% at the highs this week.
Both are keeping rather flat today with the former at around 1.27% and the latter at 2.04% going into European morning trade. Meanwhile, 10-year breakevens have also eased a little to 2.21% from 2.24% earlier in the week.
The trend and momentum is still largely intact, so that suggests that the market continues to keep a keen focus on the reflation narrative since the end of last week.
However, any further selloff in the bond market may have to wait a little longer as traders digest the moves earlier in the week and weigh up the pace of it in general.
So far, this is reason enough for equities to keep more tepid with US stocks again showing little poise yesterday to finish more mixed; though recovering off the lows for the day.
Meanwhile, the dollar held its own over the past two days but is keeping little changed across the board today as traders await for more clues ahead of the weekend.
As much as there are plenty of moving parts at play, the focus on reflation and the bond market is one that will continue to offer the most direction to traders at this time.
