Another strong bond auction weighs on the US dollar
Will it be sustained
US 10-year yields are down 5 bps to 1.078% after today's bond auction attracted much more demand that expected.
The same thing happened yesterday and it kicked off a dollar slump for the remainder of New York trade. Already, the dollar is under some pressure with USD/CAD down 22 pips to the lows of the day at 1.2689.
I don't see why we can't have a repeat of yesterday. It's suddenly clear that there is a lot more real demand for bonds that anticipated, plus the $300B per month from the Fed. It's tough to get any upside momentum in rates. That could change with 'trillions' in new spending tomorrow but for now, the bond market is in charge.