- 10-year US Treasury bond yield loses more than 4%.
- US Dollar Index clings to recovery gains to limit pair’s losses.
- Major European equity indexes post strong gains on Wednesday.
After dipping a few pips below the 106 handle earlier in the day, the USD/JPY pair started to retrace its fall and was last seen trading at 106.25, still down 0.2% on the day.
Global equity indexes rebound
The 10-year US Treasury bond yield continues to push lower on Wednesday and was last down 4.63% on the day at 1.658%, lowest since October 2016. Despite this sharp drop, however, the fact that major European equity indexes post strong gains today makes it hard for the JPY to continue to gather strength as a safe-haven. At the moment, Germany’s DAX is up 1.43% on the day while the Euro Stoxx 50 is adding 1.35%. Furthermore, the S&P 500 Futures is rising 0.33% to suggest that Wall Street is likely to start the day in the positive territory.
In the meantime, the selling pressure surrounding the Greenback seems to have faded away on Wednesday, allowing the US Dollar Index to push above 97.70 and helping the pair erase its losses.
Later in the session, Chicago Fed President Evans, who voiced his support for a total of 50 basis points rate cut in 2019 back in early July, will be delivering a speech. The only data from the US will be the Federal Reserve’s Consumer Credit report but investors are likely to remain focused on the market’s risk perception.
Technical levels to watch for
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