The bond market is starting to take charge again as we see 10-year Treasury yields move above 4% in trading today. There was already a warning after the ISM data yesterday here and we are now seeing a bit more of a follow through ahead of European trading later.
It looks like market players are starting to come around to the idea that the Fed may very well hike more aggressively in the months ahead as inflation pressures remain stickier than anticipated.
It's all about the cycle between economic data and central bank pricing now and that's what is going on in the bond market right now. In turn, that is seeing spillovers elsewhere with S&P 500 futures weighed down by 0.5%. Meanwhile, the dollar is higher across the board and posting a modest recovery after yesterday's drop.