FX Update: The path to Fed yield curve control
John Hardy
The pressure from rising yields came to at least a near-term climax yesterday with a new spectacular spike in US Treasury yields that spooked global markets and drove a general leveraging across asset classes. In FX, this meant that the strongest trends of late reversed brutally, with JPY and USD soaring and traditional risk-correlated FX and sterling suddenly hitting the skids. Now the exercise is in gauging the scale of further fallout, or when the Feed swoops to the rescue.