This is the tail that’s wagging the dog at the moment.
The dip an hour ago in 10-year yields led to immediate reverberations in FX, with commodity currencies (esp NZD) falling quickly.
You can sense the apprehension throughout markets. Equities have had a nice two-day bounce but it’s been a big move and needs a breather. Whether that’s sideways or a retracement will depend on what happens in yields next.
As you can see from that chart, the the 1.260% level is shaping up toe be support. It also looks like a bit of a head-and-shoulders top that would target 1.22%.