It's going to be all about the yields story in markets once again
10-year Treasury yields are up 2.8 bps on the day to 3.209% and that's the highest level yields have stuck at since 2011. It was already much of the case in overnight trading that yields threatened to break out and we're seeing further evidence here in early trades to start the new day.
If we're able to see a hold above 3.20% into the close of today, expect yields to take centre stage in markets once again. This will start prompting alarm bells like those seen in early January and will surely start to weigh on stocks. Should markets turn more risk off expect that to put further bids in the dollar.
And with Treasury yields soaring to multi-year highs, expect that to further weigh on emerging markets and promote even more flows back into the dollar. We're not seeing much of a reaction in currencies just yet but this is something that you have to keep an eye on. Watch this space.
