It is tough to square this one up with the rally in equities and the stumble in the dollar yesterday. If the emphasis is on the Fed potentially slowing down or is perceived to be less hawkish, you'd figure yields will fall. But instead, here we are. There's going to be quite a bit to digest before the week is over and at the end of the day, someone has to be right.
More often than not, the saying is that the bond market is always right but these are peculiar times in markets. So, we'll see. In any case, there is a big level that is holding for 10-year Treasury yields now that we've cleared the Fed and that seems to be where traders are drawing the line to get back with the selling in bonds:
10-year yields are up by 8 bps to 2.81% on the day but that hasn't had much effect on the Japanese yen. USD/JPY is still down 0.7% on the day to 135.55 currently after having hit a low of 135.11 earlier in the day. I'd wager if yields continue to hold higher, that will eventually bring up yen pairs but we're still caught in the post-Fed market right now and there's also US Q2 GDP data to follow later in the day.
All of that will make for an interesting couple of sessions before the weekend comes around.
