Bond yields hold lower after European PMI woes today

<p>Here's a snapshot of bond yields at the moment:</p><ul><li>10-year German bond yields down 5.5 bps to 2.373%</li><li>10-year French bond yields down 5.3 bps to 2.935%</li><li>10-year UK gilt yields down 8.5 bps to 4.194%</li><li>10-year Treasury yields down 3.2 bps to 3.807%</li></ul><p>The drag today comes largely off the back of the softer PMI readings in the euro area and the UK earlier. As <a href="https://www.forexlive.com/news/a-snapshot-of-june-inflation-among-major-economies-20230724/" target="_blank" rel="follow">high inflation continues to stay rampant</a> across major economies, an added economic downturn is making things more difficult for central banks. Recession risks are on the rise and that's not providing much confidence on the outlook in the months ahead.</p><p>What is even worrying is that as major central banks continue to tighten, they may risk breaking something down the road. Remember this argument <a href="https://www.forexlive.com/news/which-comes-first-low-inflation-or-the-economy-breaking-20230711/" target="_blank" rel="follow">here</a>?</p><p>As for today, the Japanese yen is among the beneficiaries of the heavier bond yields. USD/JPY was hovering around 141.30-40 levels earlier but has now fallen to fresh lows of the day – down 0.5% to 141.10. Price fell short of testing the 142.00 mark and 61.8 Fib retracement level at the end of last week, but key support is still seen closer to 140.00 at this point:</p>

This article was written by Justin Low at www.forexlive.com.