What happens when the dam breaks?
It's starting to feel like it's only a matter of time until the bond market breaks. The long end is leading the way with US 30-year yields up 8.5 bps to 1.74% today. That's a heartbeat away from the June/November double top at 1.76%.
The normal inclination for this kind of news is US dollar strength and equity weakness but there's some reflexivity because if stocks fall too much, then a bid for bonds emerges. Plus the Fed is looming.
I think the price action today was a bit of a tell. The dollar rallied initially on higher yields but it didn't last long. With 10s hitting 1% and bond yields breaking out, I think we see something similar but on a bigger scale and perhaps lasting for a few days.
