The normally sedate US Treasury market is whipping and driving today. We’re back toward session highs yield-wise at 2.88%. The USD/JPY is firming up as well, no surprise, now at 82.90 after bouncing from 82.70 once again. EUR/USD is stuck in neutral, unable to overcome sellers in the 1.3620/25 area.
UPDATE: This story, which calls the permanent extension of a Bush tax cuts (not a done deal) a “definite negative” for the US sovereign debt outlook is said to be responsible for the back-up in yields, along with selling to hedge a drop in muni bonds, Santelli says.
