Here is a quick snapshot of bond yields at the moment:
- Germany’s 10-year bund yield fell 5.5 basis points to 2.373%.
- French 10-year yields fell 5.3 basis points to 2.935%.
- 10-year UK Treasury yield fell 8.5 basis points to 4.194%
- The 10-year Treasury yield fell 3.2 basis points, to 3.807%.
Today’s drawdown largely comes from weaker PMI readings in the Eurozone and the UK earlier. With high inflation continuing to spread across major economies, an additional economic slowdown is making things even more difficult for central banks. Recession risks are on the rise and this does not provide much confidence in the outlook for the coming months.
The worrying thing is that as major central banks continue to tighten, they could risk breaking something down the road. Remember this argument here?
Today, the Japanese yen is among the beneficiaries of heavy bond yields. USD/JPY was hovering around 141.30-40 levels earlier but has now fallen to today’s lows – down 0.5% to 141.10. The price dropped away from testing the 142.00 mark and the 61.8 Fibonacci retracement level at the end of last week, but there is still a major support near 140.00 at this point:
USD/JPY daily chart