The market pricing is showing that the odds of a June move have been reduced to ~62% now. That is down from ~68% at the end of last week here. And according to the CME Fedwatch tool, a 25 bps rate cut is now paired with just a ~56% probability. If anything, it suggests that we are looking at more of a coin flip ahead of the next big set of data points in the next two weeks.

Bond traders are also starting to act up as already seen yesterday. I shared some technical levels to be mindful of here and we are starting to see that come into play. 10-year yields are now up 2 bps today to 4.349% and is knocking on the door of the recent 4.35% ceiling.

It isn’t exactly reverberating across broader markets just yet but if the key level breaks, I reckon traders will start to pay more attention. Watch this space.

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