We’re back to where we started.
US markets have completely erased the moves after the strong non-farm payrolls report. The S&P 500 is now down just 5 points to 4071 and on track for a weekly close above 200-day moving average for the first time since April. It’s an impressive performance.
More curious is the relentless bid in long-dated bonds. US 10s are down 3 bps to 3.49% from a high of 3.63%. US 30s are down 8 bps to 3.55% from a high of 3.70%.
One line of thinking is that bond market participants are trying to get ahead of ‘the next big trade’ which is the weakening of the global economy and a fall in inflation. Whatever it is, the decline in yields is sapping the US dollar.
EURUSD=X 
EURCAD=X 
EURJPY=X 
GBPUSD=X 
EURNZD=X 
AUDUSD=X 
CADUSD=X 