Once bitten, twice shy..

<p>The lesson learnt yesterday is that the bond market rout is not really over just yet. And that is keeping traders on their toes as we get towards the final trading day of the week. 10-year Treasury yields are down slightly by 5 bps to 4.650% but we're not really seeing equities pull meaningfully higher or the dollar run back the gains from yesterday.</p><p>It's a case of once bitten, twice shy. If this was the case before US trading yesterday, I reckon we would've seen some extensions to the moves elsewhere in reaction to the bond market. Instead, it's just a light retracement to yesterday's price action. That is largely because the heavy selling in bonds tends to hit in US trading, so we're not out of the woods just yet today.</p><p>USD/JPY is down 0.1% to 149.65 while EUR/USD is up 0.2% to 1.0550 currently. The latter is stuck in a 23 pips range though, and that exemplifies the lack of interest in the major currencies space to follow up on the lower bond yields at the moment.</p><p>Meanwhile, S&amp;P 500 futures are only up 0.2% as investors are going to want to wait until US trading before really firming up any bets before the weekend comes along.</p>

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