It's unclear what's happening in the bond market today as US 30-year yields lead the way higher, up 8.5 bps to 4.288%. The front-end is more subdued with 2s flat at 4.85%, though well-above the post-NFP low of 4.76%.
Given the dovish data today, it's tough to explain why bonds are selling off. I wonder if there are flatten trades clearing out or something else is going on around the turn of the month. Energy could also be a factor with the market worried it could keep the Fed higher for longer. Or it could be a case of 'buy the rumour, sell the fact'.
In any case, the US dollar is suddenly surging in a total reversal from the initial non-farm payrolls report.
The dollar move is right across the board with the loonie particularly hard hit despite rising oil prices. That's because Canada's economy surprisingly contracted in the Q2 GDP report.
