The US 10-year yields have reached its highest level in 16 years at 4.55%, causing a ripple effect across various markets. This has led to the strengthening of the US dollar, particularly against the Japanese yen, with USD/JPY crossing the 149.00 mark. Meanwhile, equities are experiencing a decline, as indicated by a drop of over 0.5% in S&P 500 futures.
Due to the aforementioned development, the Australian dollar (AUD) and New Zealand dollar (NZD) have also hit their daily lows. AUD/USD is currently down 0.3% at 0.6404, while NZD/USD has also slipped 0.3% to 0.5950. Overall, the situation is not favorable for risk trades as Europe prepares to open, resulting in the dollar enjoying a positive outlook.
In summary, the US 10-year yields reaching a 16-year high has had widespread consequences in the markets. The US dollar has gained strength against the Japanese yen, while equities have suffered a decline. The Australian and New Zealand dollars have also experienced losses, indicating a negative sentiment towards risk trades. As a result, the US dollar is currently in a favorable position.