10-year Treasury yields are at their highest since October 2008, briefly crossing 4% in European morning trade as the pressure on the bond market continues to mount. I shared some thoughts about the situation yesterday here as to how the threat of financial dislocations isn't just stemming from the UK alone at the moment. 10-year gilt yields are little changed around 4.50% but as we saw yesterday, it doesn't take much for the rout to resume.

Equities are also beginning to show signs of breaking down further as noted here, and all of this continues to work in the dollar's favour as the hawkish Fed remains the only game in town for the time being.

GBP/USD remains in the spotlight as the pound faces heavy scrutiny amid Kwarteng's budget, which even saw the IMF openly criticise (well, sort of) it earlier in the day. The pair is down 0.5% to 1.0680 as it is staying pressured and caught in a more volatile range now around 1.0600 to 1.1000 I would say:

GBPUSD D1 28-09

A test of the Monday lows around 1.0357 (or below 1.0400 in general) is arguably the path of least resistance but we'll see if the dollar hs appetite for that heading into month-end.

Elsewhere, EUR/USD is down 0.2% to 0.9570 as the downside pressure continues to linger while commodity currencies are also taking a beating amid the selloff in risk trades. USD/CAD is up 0.4% to 1.3775 with buyers eyeing 1.3800 currently. The aussie is well on its way towards establishing its status as the Pacific peso again with another 0.7% drop below 0.6400 today - to its lowest levels since May 2020:

AUDUSD W1 28-09

The 0.6000 handle looks to be the next key target for sellers, at least based off the chart above.

Meanwhile, the yen is somewhat keeping pace with the dollar today but I would argue that is more to do with USD/JPY coming close to clipping the 145.00 mark again. That is seeing speculators take some off the top before engaging with another round of potential intervention by the BOJ/MOF again at the key level.

USDJPY D1 28-09