The treasury yield curve is steepest since May 16

Treasury yield curve as represented by the difference between the 10-year yield and the 2-year yield currently stands at 0.99, which is the highest since May 16. 

The USD responds positively to a steep yield curve (widening gap between yields) and vice versa. 

A surprisingly strong surge in US jobs in June coupled with a sell-off in global bonds last week could be behind the steepening of the yield curve. 

Focus on Yellen testimony

Markets will be all ears to Fed Chair Yellen’s comments on the timing of subsequent interest rate hikes and more importantly, off-loading the central bank’s massive balance sheet. Yellen testimony is scheduled on Wednesday at 10:00 GMT.