The flight to safety on Friday put a bid in bonds but all of that is being undone this week with 10-year Treasury yields now climbing up to its highest since 9 October again. Yields look poised to march towards 4.80% once more as market fears abate with regards to the Israel-Hamas conflict, at least for now.
The US is seen potentially stepping in and that could invite other forces in the region as well. But it's a bridge that we will cross once we get to it. At least for the time being, bond traders are sticking to what they are familiar with over the past few months.
And as yields stay the course to push higher, expect that to eventually have broader market spillovers. For stocks, that could keep sentiment on edge and weigh on the overall mood once again. And as for major currencies, it is likely to help keep the dollar underpinned in the bigger picture.