Dollar remains dominant, retaining control in the market

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The article discusses the current state of bonds and its impact on the US dollar. Despite a slight decline in 10-year yields, the dollar remains strong due to ongoing bond sell-offs. This is affecting other markets, with equities experiencing a downturn, and the euro hovering at its lowest levels since March. The article emphasizes that being bearish on the dollar is challenging because there are several factors favoring its strength, especially when considering the charts.

Additionally, despite being in intervention territory for USD/JPY, the pair is trading lower due to fears of Japanese intervention. This reflects how traders perceive the dollar currently, even if its gains may be speculative. The article suggests that with equities experiencing a slump and potential technical breaks, there may be more trouble ahead for risk-based plays, which will further strengthen the dollar. The next significant data point for the US will be the jobs report on October 6, with smaller employment details expected in the days leading up to it. However, for this week, the main factor affecting the dollar’s position is the month-end flow.

In summary, the article highlights the impact of ongoing bond sell-offs on the US dollar and other financial markets. Despite a slight decline in yields, the dollar remains strong, leading to a downturn in equities and a decline in the euro. Traders are finding it challenging to be bearish on the dollar due to various factors supporting its strength. With potential technical breaks in equities, there could be further trouble in risk-based plays, ultimately boosting the dollar’s position. The next significant data point will be the jobs report on October 6, while month-end flows currently influence the dollar’s performance.

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