There seems to be no breakthrough in the performance of the 10-year treasury this week
Bond sellers are facing some blow as yields fall a week ago, falling from 1.38% on Tuesday to a high of 1.32%.
This is holding yen pairs today, and the softer sense of risk in the market is not really contributing to the general mood.
There is a slight confusion in the market about what to do on Friday about the lack of US non-farm payroll calculations, and this is arguably best illustrated by the Treasury’s indecision.
However, the Fed is currently claiming that the report is not that badly and they are still up to date by the end of the year. So, it takes away the last narrative.
However, in the midst of increasing market risk, a slight narrowing, which is currently a more difficult price for market participants.
Obviously, the move towards austerity is still a key point, but what does it look like against the background of risks that could jeopardize economic recovery?
Some of these risks include:
- Economic data like supply chain disruptions and high inflation are disappointing
- Shares have been foaming in recent weeks
- The uncertainty of the delta variant usually remains
- The risks in the Chinese financial market are wide-ranging against a number of sectors
- Risk of Evergrande infection
It is difficult to try to put it all together and then say that it is “easy” for policymakers to remove economic support.
If anything, it all suggests that the market is quite vulnerable, but if the Fed is not currently taking a step towards downgrading, when will it ever be possible?
In any case, the market seems to be struggling with all this, and the latest treasury action says that there will be several more weeks until a real answer is received.