USD/JPY is already a key beneficiary from all this, not least with the BOJ set to keep interest rates unchanged later this week. The pair is also angling for a seventh straight day of gains as seen here.
There might be a line of thinking that traders are anticipating the Fed to cut this week then signal an outright pause. If so, I reckon they will be disappointed as Powell might not be too explicit about that. That will certainly drag down short-term rates at least. But is the longer end on the rise because of the more confident economic picture?
So, was the latest dip in yields just a correction and we're now seeing the natural underlying trend resume its course? There's certainly an argument for that. This line of thinking hinges on Trump bolstering the economy next year, with or without tax cuts. And with the continued economic resilience as of late, the US continues to show that it is the cleanest shirt among the dirty laundry.
In any case, things are certainly heating up ahead of the Fed tomorrow. If there's any reason for yields to run towards 4.50% and potentially break that after, risk trades will be lining up for some pain in the second half of the week.
This article was written by Justin Low at www.forexlive.com.Hence then, the article about the bond selling continues ahead of the fed tomorrow was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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