10-year yields are the most important metric in all markets. That’s the base level where lending is done and it dominates FX flows.
Taking a look at the global ladscape, the story is generally compression. In Europe, rates are extremely low aside from the bad actors in Greece and Italy. In the Asia-Pacific region, Australian and New Zealand aren’t the high-yielders they used to be and are in imminent danger of falling behind Canada as the BOC hikes. Japan is locked to zero.
The US is truly the intriguing market as it attempts to break above the 3% range. If it could make a definitive move to 3.50% or higher, it shows how advantageous that extra yield is.