The thinking is that forced selling in London is keeping US Treasury buyers at bay. Yesterday that was the trade, or at least it was until Bailey pulled the rug out from under it.
Since London clocked off a modest bid has appeared in Treasuries. Yielsd are now down 2.2 bps on the day to 3.91%.
US 10 year yields
if the bid in bonds picks up we could see some softness in the US dollar and strength in equities. At the same time, I think most market participants are hesitant to get involved ahead of CPI.
