Not the usual correlation
This week’s theme has been lower yields and a higher dollar but it started unwinding yesterday and that has continued.
US 10-year yields are now up 7.2 bps to 1.36% today. That’s 11 bps above yesterday’s lows, which coincided with the 200-day moving average.

No offense to our Scottish and Welsh readers
The cable bid has been relentless today.
It was briefly squashed on fixing sales but it quickly came back and has been a one-way move that’s now extended to 100 pips. I earlier said that the weekly high of 1.3898 was out of reach before the close but

Forex news from the European trading session – 9 July 2021
Headlines:
Markets:
– AUD leads, JPY lags on the day
– European equities higher; S&P 500 futures up 0.3%

ECB releases the accounts of its June monetary policy meeting
As mentioned before, September is the key meeting date to watch as that is when they might introduce some changes to the existing PEPP purchases.

Comments by BOE governor, Andrew Bailey
Nothing else of note so far but as mentioned earlier , the panel discussion isn’t likely to draw much significant policy remarks from both Lagarde and Bailey.

AUD/USD turns around the earlier drop to climb to 0.7460
The low today hit 0.7411 in Asian trading, which marked the lowest level for the pair since December, but things are quickly changing now in European trading as risk sentiment is also lookin more positive for the time being.

PBOC slashes the reserve ratio requirements
these
This is the first RRR cut since April last year, when the economy was hit by the pandemic and is another message by Chinese officials that they are still trying to bolster economic growth despite recent concerns that support may be lesser to come by this year.

ECB announces the results of its latest strategy review
– New strategy adopts symmetric 2% inflation target over medium-term
– This may also imply a transitory period in which inflation is moderately above target
The decision here has been very much expected and is a move away from their previous inflation targeting of „below but close to 2%“.

10-year Treasury yields down by nearly 7 bps today to 1.25%
A key question that is being posed by the bond market right now is, are we seeing the death of the reflation trade? And why exactly is that the case?

Equities being hammered across the board
S&P 500 futures are now down 1.5% and that is putting pressure on risk trades on the day, with commodity currencies bearing the brunt in the FX space.