THE UNUSUAL SIMULTANEOUS selloff in the US dollar and stocks seems to be in function of tumbling US bond yields as US data continues to disappoint throughout the day. The broad weakness in manufacturing ISM (including the 20-point tumble in the prices paid index to Nov lows), the unexpected 13K rise in jobless claims to 472K, the 30% plunge in May pending home sales, cannot be positive for yields. All these figures are helping to drive 10-yr yields to fresh 3-month lows below 2.90%. The ongoing tumble in yields is unlikely to spare the greenback in the event of a negative surprise in US jobs figures. EURUSD capped at 1.2480, USDJPY eyes 86.80 target, followed by 86.20 in event of Friday NFP selloff.
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