10-year Treasury yields are now down nearly 4 bps to under 3.70% and that is adding some weight to USD/JPY. The pair is now dragged down by 0.9% to near 142.00 with the 5 August low of 141.68 in focus. Equities are also not spared to further breakdown in yields, with S&P 500 futures now down 0.8%. A risk-off wave is taking flight.
All of this comes as traders look to be positioning for more angst going into the US jobs report later in the day.
It's certainly going to be a very interesting showdown. A poor set of labour market indicators could very well set off more kicking and screaming, in asking for the Fed to cut by 50 bps this month. So, that's one to watch out for.
For now, these positioning flows will still need some vindication. So, just be mindful about that when you're treading the water today.
