The bond market remains a key driver of broader sentiment at the moment

<p>Bonds are continuing to suffer a beating and it's not looking pretty. This is not a market that is too sensitive on inflation at the moment and it seems to be more of a supply-demand reaction. This is something Bill Ackman pointed to when he made his short bet earlier this month <a href="https://www.forexlive.com/news/bill-ackman-is-shorting-bonds-20230803/" target="_blank" rel="follow">here</a>.</p><p>There was a mild pullback at the start of this month in 10-year yields back to the 4% mark but we are now seeing yields push up to 4.22% and that is the highest since November last year.</p><p>The Fitch credit ratings cut may also be a factor although I wouldn't pin that as being a crucial one in this instance.</p><p>If you're only going to have one chart to watch in trying to read broader market sentiment, I would say this is probably the best one.</p><p>In response to higher yields, we have seen the dollar find a stronger footing, equities start to come under a little more pressure, and in particular gold stumble all the way back to near $1,900 again.</p>

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