Treasury yields are lower to start European trading
10-year yields are down by 2.3 bps to 1.513% as the surge higher in yields since the technical breakout last week is taking a bit of a breather.
This comes as we also see energy prices come off the boil with oil down 2% to $73.75 currently and natural gas also down 3.4% to $5.68 on the day. For some context, the latter peaked at $6.33 in trading yesterday so that’s a over 10% retreat from the highs.
Going back to the bond market, the technical picture still bodes well for sellers but amid the intense focus on the energy crisis this week, the connection (inflation-wise) is something to pay attention to as it has a key influence on near-term movement.
In turn, we have seen USD/JPY fall to a low of 111.35 on the day as the pair is also retreating after contesting the July highs at 111.64-66 in the past few sessions: