The bond market is in charge
10 year yield continues to rise
US 10-year note yields are up 27 basis points from last week's low in a clear sign that markets are less-worried about the trade war and economic growth.
The move follows a large drop starting at the end of July. There is some talk about the 55-day moving average near 1.80% but I think the way to look at it is via a retracement.
That puts the 1.76% and 1.84% levels as key ones to watch on a signal about this leg of the trade war. If those are breached to the upside, then the coast is probably clear and USD/JPY could meaningfully rally higher.
The other important point to make is that we are in a retracement phase. More positive talk on US-China relations is a theme today once again and unless (until?) that falls apart then the mood will remain upbeat.