I have been waiting for signs to evaluate whether real money was going to FOMO into bonds and early returns suggest the appetite is there.
Yields retraced on Monday after last week's big fall but they're lower again today, led by a 12 bps fall at the long end. US 10s are down 11 bps to 4.55%, which is close to Friday's closing level. Today's auction of 3s met good demand.
US 10s daily
My base case is that we will trace out a range in the 4.50-4.75% range until US economic data worsens but risks are now towards lower yields. In turn, that's weighing on the dollar and boosting risk trades.
Cable is benefiting in the past hour as it has bounced to 1.2302 from a low of 1.2263. Other US dollar moves are of a similar scope.
GBPUSD 10 mins
