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Forex Flash: Current US yields are unusual, but justified – Goldman Sachs

As the market looks to the prospect of a more ‘normal’ recovery, the question of when and how quickly US government yields might rise is now sharply in focus. Current bond yield levels are unusual, but not unjustified. The extreme economic circumstances of the past few years and unprecedented central bank responses explain why yields have been where they have been.

According to the Economics Research Team at Goldman Sachs, “Mapping our policy views into yields helps illustrate likely ranges. We forecast a steady, but gradual, rise in yields over the next few years, based on our macro models of bond valuation. Here we use a complementary approach, decomposing bonds into the expected average policy path and the ‘term premium’, and mapping our economic outlook into both pieces.” Because there is uncertainty about this mapping, this defines a range of plausible outcomes consistent with our forecast.

Forex Flash: AUD/USD strategy profile – Westpac

The data calendar turns very quiet but there is always interest in the minutes from the RBA Board meeting (Tuesday). This is also the day we hear speeches from RBA’s Debelle and Lowe. The RBA’s general tone should remain cautious, maintaining an easing bias.
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Forex: USD/JPY remains "green" after testing opening price

The US data load released at 12:30 GMT provoked a spike to 96.59 high, but the USD/JPY soon retraced its gains for a retest of the opening price of 96.12, which held the pair and is allowing the daily candlestick to remain "green".
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