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US Dollar starting to build support as market focus turns to the ECB
With such an extreme shift in sentiment on bond markets in recent weeks, there is always the potential for positioning to become stretched. Whilst there are still negative data points to drag on yields, it means that signs of any positive data have a disproportionately positive impact too. This is what was seen with the positive ISM Non-Manufacturing surprise yesterday. The data caused a significant one day turnaround on yields and the dollar which had been previously reacting to the big negative surprise in the ADP employment change. The move also suggests that the market could be close to a turning point. A lot is ... (full story)