USD/JPY, EUR/USD flows: 20yr auction in focus Wed as UST losing hold
Event focus on Wednesday, including Nvidia earnings and US20yr auction
Latter comes as US long end is losing its grip of key ceiling levels, risking extension of selloff
A few notable event risks out of the US to watch for Wednesday, on opposite sides of the coin. One is Nvidia earnings, and not just the results but the reaction - that is, whether strong results are bought, or over-heated semiconductors 'sell the news'.
The other is the 20yr US action as the UST market remains weak today and continues to lose its grip of some key high levels around big figures and just through. The 20yr is testing into last May's high of 5.19% into the sale and above there is the 2024 highs of around 5.3-4%. The market to date has been a little complacent on the pressure that could come from rising long-end yields, particularly in the context of rollover requirements. A poor result would come at a sensitive time. Rising US yields and bond volatility would tend to play to the current dollar rally action.