US Dollar Has A Strong Week Against Several Global Currencies

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But what is this key market indicator telling us?

Let's start with the second question first; people care for a number of important reasons.

The 10-year T-note yield was up two basis points to 3.02% on Wednesday. For example, the spread between U.S. 10-year and German 10-year bonds is now near all-time highs.

Some traders, while expecting the 10-year yield to breach 3 percent as inevitable, said it is not a harbinger of a market rout due to evidence of buying in the past 24 hours emerging when the 10-year yield moves near that threshold. Indeed, the relative strength in XBD is one reason for believing that the stock market will muddle its way through the threat of higher interest rates.

From the turn of the millennium to 2007, the 10-year US Treasury yield averaged 4.7 per cent, according to Reuters data. That can slow down economic growth.

You see, after the 2008 financial crisis, the Federal Reserve played with fire by lowering interest rates-and by buying bonds outright with printed money. "People don't seem really concerned that borrowing costs are rising". It reflects a change in the People's Bank of China's macro policies rather than any kind of dramatic concern about the Chinese economy.

The rise in yields also comes amid signs United States inflation may be slowly creeping higher and that global central banks will continue to tighten policy in the months ahead.

The Mexican peso also continued to weaken on Wednesday, breaking through 19 to the dollar to hit a 2018 high of 19.143 pesos per dollar.

Oil is at its highest since late 2014.

The pullback in the euro and pound gave a bounce to European markets, with Frankfurt, Paris and London all rising modestly.

According to The Street, "Higher borrowing costs also slow corporate investment and personal spending, two key drivers of USA economic growth, putting further pressure on future earnings generation and blunting the value of domestic stock markets". So, if bonds collapse, a lot of pension funds could get in trouble. The yen retreated, helping spur Japan's Topix index to the highest in nearly two months, and Chinese shares rallied on signs the government may ease off tightening measures if warranted.

Government bonds also fell across the global markets.

But easing world stocks limited gold's losses, as investors awaited earnings from global tech firms and US bond yields approached peaks that hurt risk appetite in the past.

"For us it's more the reasons why we're seeing the move: better growth outlook, a little bit more inflation and faster rate hikes being priced in by the market", Kerry Craig, Melbourne-based global market strategist at JPMorgan Asset Management, told Bloomberg TV. In addition, as part of its balance sheet normalization plan, the Fed is gradually increasing the sales of US Treasuries that it holds on its balance sheet.

Investors have been weighing the implications of climbing bond yields that were in part spurred by higher commodity prices and concern surrounding their inflationary impact on the wider economy.

Auto loans, home mortgages, and other loans are tied to the benchmark 10-year yield.