Experienced traders call the bond market the “smartest” of all the asset-level markets, and based on the moves we’re seeing in the US bond market, the smart traders have definitely picked up on something this week.

Yesterday, Fed Chair Powell noted that the central bank was “a long way” from neutral interest rates and may raise rates “past neutral,” suggesting that the Fed could remain in a hawkish posture for longer than many market participants had expected. As a result, we’ve seen the yield on all Treasuries with five years to maturity or less surge to their highest level since 2008, the yield on the 10-year bond rise to its highest level since 2011 at 3.23%, and the 30-year long bond yield rise to a peak of 3.39% so far, its highest level since 2014 (for more on these moves, see my colleague Fawad Razaqzada’s piece “Rising yields could undermine stocks, reignite EM currency crisis” from earlier today).

As a result, the greenback is the second strongest major currency on the week to date, trailing only the loonie, which has found support from rising oil prices. The US dollar’s gains have been particularly pronounced against emerging market currencies, and while Singapore is definitively a developed market, given its elevated GDP per capita of nearly $53,000, its currency can still serve as a more liquid proxy for traders’ risk appetite to riskier bets like emerging markets.

Technically speaking, USD/SGD has been in a clear uptrend for the majority of the year. This week’s big rally has pushed the pair up to test the top of its two-month, 200-pip range between 1.3615 and 1.3815. Rates are showing signs of pausing so far today, but a strong Non-Farm Payrolls report tomorrow (especially if we see average hourly earnings rise a 3%+ annualized rate for the first time since 2009), the greenback could power through that key resistance level. In that scenario, a measured move” objective would project a 200-pip rally in the pair up toward 1.40.