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The market is still rocking a little back and forth to start the week with bond yields retreating today and that is weighing on yen pairs in general ahead of European trading.
US 2-year yields are down by nearly 3.5 bps to 0.48% while 10-year yields are down 2.5 bps to just below 1.55%, as we continue to count down to the FOMC meeting tomorrow.
Elsewhere, equities are also slightly softer after the gains yesterday with US futures down around 0.1% to 0.2% for now.
In FX, the aussie is the laggard as the RBA provided some subtle shifts to opening up on rate hikes but still reaffirming a dovish stance overall. Commodity currencies are also lagging in general as the dollar is keeping steadier for the most part except against the yen.
There is the potential for AUD/USD to explore further downside post-RBA but a lot of that will require confirmation from the dollar side of the equation - which will hinge on the Fed.
Even any firm direction in the bond market will have to wait until post-FOMC to be certain, so until then, don't expect to derive much from the market moves in the meantime.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
