US yields reach 3%

US government 10-year bond yields rose to 3% (and slightly above for a time) yesterday, the first time they have been at this level since late 2013/early 2014. They may ultimately push on further from here, given a likely pick-up in US growth this year, a further rise in inflation, and continued Fed interest rate hikes

Higher US yields may support the dollar, though there was a temporary reprieve for the euro against the US currency yesterday. It bounced to around $1.2250 before subsequently falling back to $1.22, and so not far off its low of the week to date of around $1.2185. Sterling remains below $1.40, having fallen at the start of the week, while the yen has weakened to over Y109 against the dollar

Consumer confidence in the US rose in April, returning close to February’s multi-decade high, with consumers’ assessment of both current and future conditions improving this month

In Germany, the Ifo index of the business climate fell for a fifth consecutive month in April ,with the Ifo research institute noting that “high spirits amongst German businesses have evaporated” with the “economy slowing  down”. We will hear the ECB’s take on the recent run of soft German and Euro area economic data following tomorrow’s Governing Council meeting

Quiet on the data front today with no releases of note