With the focus this week on US big data, Treasuries will continue to stay in the spotlight once again. The rebound in 10-year yields from non-farm payrolls now brings attention back to the January high near 4.20%. For today, 10-year yields are down slightly by 1 basis point to 4.175%, but all eyes are on U.S. CPI data tomorrow.
This may be what bond sellers are looking for in raising the bar above the highlighted level of 4.20%. If so, it will surely impact the broader markets during the week.
Just keep in mind that tomorrow’s inflation numbers aren’t the only important US data on the agenda this week. There will be retail sales again on Thursday, followed by producer prices and the University of Michigan Consumer Confidence Survey on Friday as well.
If yields were to fall from the 4.20% mark towards 4%, or even below, this should drag the dollar down. As for risk trades, the S&P 500 is hoping they consolidate a clear break above 5,000 from last week.