Commodity currencies turn lower on bond-market angst

Rising yields outweigh vaccine optimism

Rising yields outweigh vaccine optimism

The great reopening trade isn’t looking so positive at the moment.

AUD/USD is down 28 pips on the day to 0.7792, a session low. Earlier optimism has been replaced about rising yields and the 50% retracement of last week’s rout has held the bounce.

Some of the worry is inflation and momentum higher in rates but gilt yields are also rising on surprisingly high issuance plans. UK 30s are now up more than 10 bps on the day.

Treasuries aren’t far behind, up 7.2 bps in 10s.

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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