It looks like tough times are ahead of us regarding the financial markets, as US yields continue to spike relentlessly. On Monday, the benchmark 10-year yield was trading another 2.5% higher, rising to new cycle highs just below 1.4%.
Since equities usually don’t like higher yields, we’ve seen some serious losses over the previous days – Nasdaq is down five days in a row, which hasn’t happened for a long time. EU bourses are also facing sell-offs.
On the other hand, rising yields are normally bullish for the USD, and the greenback was seen higher across the board during the London session, with the EURUSD pair falling below 1.21 and the USDJPY pair rising toward 106.
The GBPUSD pair was trying to hold the psychological level of 1.40.
For some reason, gold was trading nearly half a percent higher today, despite rising yields and the USD. It looks like we could see a little correction in the bullion as it was sold-off heavily during the previous week.
Later in the day, German IFO surveys are expected to stay near last month’s levels, while investors will also focus on the ECB’s Lagarde speech.