With Japan markets closed earlier, Treasuries are finally now getting the day started and we're seeing yields marked down lower. That isn't a surprise given how the dollar reacted with the bond market arguably being the lead mover. 10-year yields are down some 7 bps to 4.31% currently, getting checked back after a surging turnaround on Friday after the US jobs report.
The initial reaction to the non-farm payrolls headline is understandable and so is the fact that the rates market might've felt a bit more forgiving of the number because of the hurricanes and strikes in the US. It might not necessarily explain the full decline in payrolls but it is something that market players can point their finger to for now at least.
But as for the rising trend in yields since October, I want to say that a big part of it is to do with the election.
Given that sentiment, it will be hard to ignore the next move in yields depending on the outcome we see this week. The 7 bps drop today in 10-year yields is just a taste of things to come and we'll definitely get plenty more volatility in the days ahead.
So, strap yourselves in. It's going to be quite the week for markets, if this drop in the water is anything to go by.