Currency Market Analysis

Sep 11, 2019 | Currency Market Analysis

Global Themes

Greenback’s losses pause as bond yields jump

The US dollar’s recent losses were put on hold overnight as a sharp jump in US bond yields extended a sharp reversal in one of the world’s most closely watched markets.

US bond yields have collapsed in 2019 – pushed lower as investors flocked into the safe haven bond market – but the last week has seen a clear turnaround in this market.

The benchmark US 10-year bond yield, which has tumbled from 2.75% to 1.43% this year, has jumped back to 1.73% in just six sessions.

ECB ahead

One reason for the bond market’s turn might be that investors have become more cautious ahead of key meetings of global central banks.

In particular, the European Central Bank meets tomorrow night, and the risk of disappointment creates the chance of a further sell-off in bonds and the potential for a sharp rise in the euro.

Consumer sentiment

In Australia, today’s consumer sentiment numbers will be closely watched after yesterday’s business confidence numbers came in below expectations.

In a big week for US data, tomorrow night sees monthly inflation readings, while Friday night sees the release of retail sales figures.

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