The bond market is starting to side with equities
10-year yields are up by 1 bps now to 1.589% as bonds are giving up earlier gains on the day. The spike in USD/JPY may be a bit too much given the magnitude of the move in Treasuries but it serves as a reminder that markets shouldn't get too carried away.
As we navigate through the session, keep an eye on the movement in bonds as it will be telling of how risk sentiment will progress throughout the day.
The key caveat will be the release of US data later on. That has the potential to drive back fear into markets upon a significant miss on expectations.
