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US yields may soon be on the rise again - BTMU

FXStreet (Łódź) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ expects US yields to start growing again on recent improvements seen in global economy, pushing the dollar up.

Key Quotes

"The unprecedented price action we witnessed last Wednesday that raised fears of a more nasty period of financial market volatility ahead shifted attention away from macro-economic developments. But the rise in US yields yesterday suggests that the focus is shifting back on to the economy again."

"US corporate earnings for Q3 are looking a bit better than expected, the China data this week indicated that the economy has at least stabilised and may even have been rebounding going into Q4, while the advance PMI readings from the euro-zone yesterday showed improvement. The euro-zone composite PMI advanced from 52.0 to 52.2, in contrast to the expected fall."

"This all suggests that US yields may soon be on the rise again, taking the dollar higher too. It is worth mentioning the often ignored Chicago Fed National Activity Index here too – the index jumped from -0.25 to +0.47, advancing by much more than expected. The Fed’s concerns over the global economy do not seem as justified today as they did a week ago."

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