The drop continues
US 10-year yields bounced from the lows of the year on better signs of a trade deal between the US and China.
Arguably, the trade news has continued to be positive but the bond market isn’t believing it. The 10-year is now threatening the 61.8% retracement of the bounce from the lows at the start of the month.
That’s an ominous signal. Watch 1.60%-1.61% to see if it holds in the next few days. If it gives way, it spells trouble for USD/JPY and other risks trades.