USD's patchy correlation with yields - Westpac

Analysts at Westpac noted that It is not at all obvious why Treasuries broke out last week as opposed to any other. 

Key Quotes:

"We heard a great deal from Federal Reserve officials but nothing very new. US data releases also didn’t change the overall picture of an economy that started the year somewhat sluggishly but is expected to accelerate. In the week ahead, the key US data releases are not due until Friday (Q1 GDP and employment costs), so market sentiment should be key to whether the 10 year can reach 3%."

"The US dollar has had a very patchy correlation with yields in recent months. Long term, we still expect that the Fed’s ongoing interest rate increases will support the greenback, but short term it is not so clear and we lean towards a soft undertone to USD."

"US equities finished last week poorly, but there are reasons to be cautiously optimistic this week. Trade tensions have slipped from the headlines for now, with the final decision on US tariffs on China not due until late May. This week’s geopolitical focus should be the first summit between South Korea and North Korea on Friday, which should reinforce optimism that a thaw is under way."