The bond market is at the wheel

<p>As has been the case in the last week or so, the turnaround came in US trading again. And that saw Treasury yields climb with 10-year yields now testing the highs from October last year.</p><p>As <a href="https://www.forexlive.com/news/the-bond-market-remains-a-key-driver-of-broader-sentiment-at-the-moment-20230815/" target="_blank" rel="follow">mentioned</a> earlier in the week, if there is only one chart you can afford to watch in markets, this would be it.</p><p>This is feeding into a stronger dollar and despite China worries, bonds are continuing to puke all over and it's not looking pretty. In turn, this just adds to worsening sentiment for equities as well.</p><p>The October high for 10-year yields was at around 4.335% and if that breaks, there isn't much else stopping the rout in bonds with yields threatening to soar to its highest levels since 2007.</p><p>The dollar may not be able to count on the Fed for further bullishness but the waves of supply in Treasuries helping to boost yields is certainly something it doesn't mind riding on at the moment.</p>

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