By Kathleen Brooks, Research Director UK EMEA, FOREX.com

In recent posts we have mentioned the importance of Treasury yields, so I thought it was time to take a closer look at US government debt and the driver of yields going forward.

The reason Treasury yields are important include:

1, They could determine the future direction of USDJPY as the differential between US Treasury yields and Japanese government bond yields are a key driver of this cross.

2, The future direction of yields could have implications for the stock market and for commodity prices. For example, if Treasuries are sold off in favour of stocks pushing yields higher (Treasury prices move inverse to yields) then we may see commodities struggle as corporate funding costs may rise. Since the start of this year, although stocks have moved higher gains in commodities have been more muted and only started to play catch up in recent days.

3, Changes in Treasury yields can have big implications for the direction of the dollar, which in turn can impact the direction of commodities and stock markets.

Potential drivers of yields in the near-term:

1, Economic data in the US: in this regard payrolls and housing data are the key releases to watch out for.