EUR/USD: Bond Rally Running out of Steam

The US bond market finally appears to be running out of steam after a big three-day rally. Yields are edging back up toward 4.70% in ten-year notes after sliding as low as 4.665. Spreads have widened out between the US and Eurozone in the last few minutes as well, to 94 bp from 92. This argues for a modest USD recovery. 1.2725 and 1.2715 are modest support on dips intraday. EUR/USD trades now at 1.2731 down from 1.2750.