Ten-year Treasury yields fall below the 200-day moving average. USD/JPY falls through 150

There is a healthy debate about what’s causing the drop in Treasury yields this week.

Some argue it’s month end flows and rebalancing, while others argue that it’s due to Trump’s pick of Scott Bessent as Treasury Secretary and hints that Kevin Warsh will be Fed chair.

I’m sympathetic to the latter and worries about the economy slowing, in part due to comments this week in earnings from Best Buy and Kohl’s among others.

I’m sympathetic to the month-end argument but the drop in yields has also come with a sharp decline in USD/JPY, which is a much larger market, though it could be a case of the tail wagging the dog.

This article was written by Adam Button at www.forexlive.com.