There are obviously a lot of moving parts in play as to why Treasuries are being sold off heavily. But even if the auction didn't say so, the main worry is that there is still some form of funding stress in the market. Leveraged funds coming under big pressure is not the sort of thing that breeds confidence, particularly in this fragile market state.
But as yields are continuing to surge higher, the ball goes back over to Trump's side of the court.
And yet, Treasury yields are still surging as the market continues to kick and scream. So, what next?
Considering their response to all this, you wouldn't want to bet on China to be the first to give in. That leaves only a battle between Trump and the Fed.
That's pretty much the situation that leveraged funds have gotten themselves into at the moment. That they have to wait and see how this game of chicken plays out.
This article was written by Justin Low at www.forexlive.com. Read More Details
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