We are going back to a familiar theme in markets today, that being buy the dollar, sell everything else. This comes as we see traders digest the happenings this week and lean towards the possibility of a more hawkish/aggressive Fed. USD/JPY is now inching just above 135.00 as 10-year Treasury yields are threatening to move above the December highs of 3.90%:
Despite the dip buying in equities this week, which finally relented yesterday, it looks to be a case where the bond market gets it right once again. Treasury yields have been trending higher through the week and have continued to pull higher after bond sellers drew the line when yields pushed up against the 200-day moving average (blue line).
The dollar is continuing to stay perky at the moment, keeping at the highs against the euro, yen, franc, aussie and kiwi while maintaining gains against the remainder of the major currencies. This comes as equities continue to stay pressured with S&P 500 futures still down 28 points, or 0.7%, currently.
