The rout in the US bond market this week continues, as prices slid and 10-year yields climbed to a high of 2.83% following the release of economic data showing jobless claims at a 6-year low. Since then, selling pressure has eased back with yields giving back about 5 basis points to 2.78% (as of 11:45AM ET). Looking at the 4-hour chart of 10-year prices, we see this pullback after a breach of the 123.16 area. While prices were lower back in early July, today's action showed a renewed expectation around Fed tapering, though there is still a bit of confusion and uncertainty out there as when the Fed will make the move. The USD has been quite dependent on the mood in the Treasury market as the link is that foreign investors (especially Japanese institutional clients that get paid to make the touch choice between holding US or Japanese bonds) like the higher yield. However, since they are also trading bonds, they dont like falling prices. So falling bond prices are a short term negative, but rising yields are a medium term positive for the USD. So, as currency traders, especially those that look at USD crosses (which I'm assuming is all of you), keep one eye on the 10-year! - Nick