The initial bearish signs, such as the Reversal Day in AUD/JPY we noted earlier this week, are snowballing. Further JPY gains are likely across the board, especially as US 10y yields threaten trendline resistance near 1.36%. In rates, we expect further bullish flattening as measured moves in the US 2-10y curve are lower. S&P futures breaking below 1320 would likely act as a catalyst for these moves.
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Barclays Capital