Bond yields are pushing higher across the board as traders are continuing to see major central banks tighten further beyond the summer, it would seem. 2-year gilt yields are up 4 bps today to 5.42% - its highest since 2008 - and that sort of sentiment is being shared across the board. Here's a look at 10-year Treasury yields, which is now on approach to the 4% mark:
The break higher from yesterday coincides with selling in equities and that signals that broader markets are getting a little nervy again on inflation and higher rates.
Considering the mood, if the US jobs report tomorrow does hint at trouble in the labour market, there might be a heavier risk-off wave in the works. But you can also look at it in the more convoluted perspective, that is softer data might mean less odds of the Fed hiking again. So, there has to be a balance.
But seeing how fear is taking over here, it looks like the path of least resistance may be to err on the side of caution for markets.
One thing to note about the rise in yields though is that it is running in contrast with a higher Japanese yen today (lower JPY pairs). USD/JPY is down 0.7% to 143.60 even as 10-year yields are up nearly 2 bps to 3.963%. Eventually, that has to sort itself out so there is an opportunity there if you're watching closely.