Treasury market steadies after auction
The last leg of US dollar weakness has been wiped out as the bond market digests an extremely strong auction. The 3.2 bps stop through in the 10-year auction was the largest in the yer but it came on a very strong indirect bid, likely foreign buyers.
The market may be treating that as a one-off as US 10-year yields creep back to 1.337% from a low of 1.307%.
With that turn, the dollar has rebounded from the lows, climbing 20 pips across the board.
Overall, the moves today have been strongest in AUD and NZD against the US dollar, perhaps owing to better sentiment in commodities around the delta variant. There are some early signs that cases are cresting in hard-hit US states like Texas and Florida.
NZD/USD:
Tomorrow, the US economic data docket features PPI and initial jobless claims.
