This is a familiar story as we were also in this position yesterday. For now, Treasury yields are sitting just slightly lower on the day but things could turn around once again later when we get to US trading. Keep that in mind if you’re looking for any changes to the trading bias in the day ahead.

At least for the moment, the dollar is still keeping steadier with light gains against the euro and pound while holding just a touch lower against the yen. USD/JPY is seen at 147.40 levels now but the 50 pips range is relatively modest compared to what we have seen in the past two days.

Elsewhere, equities are not really finding much enthusiasm. It has been one-way traffic this week and I reckon investors would only feel more comfortable if the bond selling also takes a bit more of a breather in US trading. Otherwise, the jittery mood looks set to continue with Adam highlighting the potential for a head-and-shoulders pattern in the S&P 500 here.

This article was written by Justin Low at www.forexlive.com.