Ten-Year Yields Rise

This is the highest the 10-year yields have been since October, and the longest stretch of rises since 2006. Analysts have interpreted this as a confidence in the prospect of an improving economy, and a decrease in the appeal of government securities as a haven asset.

This is also on the heals of the Federal Reserve last week raising its assessment of the economy. Overnight index swaps show that traders expect a 0.25 federal funds rate rise as early as 2013. Fear about Europe’s debt crisis has also moderated somewhat, which in addition takes away some of the haven appeal of US government notes.

Source: Bloomberg

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.