Yields Spike Further, USDJPY Goes Vertical

At the same time, the USDJPY pair rose another 1.5%, testing the 124 level, the level unseen since the summer of 2015. US yields and the USDJPY pair are usually tightly correlated, so if bonds continue to bleed (sending yields higher), the USDJPY pair might jump toward the 125 zone soon.

Traders are now pricing in a 50 bps rate hike at the Fed's next meeting, while another 50 bps rate increase could follow afterward. In contrast, the ECB is expected to "maybe" deliver one 25 bps hike late in 2022. What a comedy.

From other news, Bank of England's Governor Andrew Bailey is due to speak about macroeconomics and financial stability at an online event hosted by Bruegel. Audience questions expected. His remarks could influence the GBPUSD pair or the FTSE index.

The US macro calendar will offer only February Trade Balance data and the Federal Reserve Bank of Dallas' Texas Manufacturing Survey, likely not impacting the markets.

Sentiment seems carefully optimistic on Monday, judging from gains in EU indices, while US benchmarks are seen only slightly lower. In addition, gold and oil are down notably during the EU session.