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Judgment Day Looms - US 10Y Yield Hitting Key Resistance
With the US bond markets closed for Veterans' Day, it is time to take a breath and examine how far (and how fast) yields have moved in the last few weeks. With the entire curve bursting higher, we focus on the 10Y yield which will need to fight through critical resistance here if rates are to continue to rise.
Last Friday, we posted a piece on the “breakout” in the 2-Year Treasury Yield. In light of the much stronger than expected jobs numbers, rates rallied on speculation that the Fed was more likely to hike rates sooner rather than later. And though the direction of longer-term rates like the 30-Year and 10-Year are predominantly market-driven as opposed to being directed by monetary policy (save for the occasional $trillion of quantitative easing purchases), those longer-term rates rose as well on Friday.
However, contrary to the 2-Year which is at multi-year highs, the longer maturities are still far from signaling any significant shift in their path to the upside. In order for that case to be made, some serious resistance levels will first need to be breached. The 10-Year Treasury Yield is currently testing one of those initial key resistance level on its chart in the 2.35%-2.40% range.
As the chart shows, the area is marked by potential resistance from, most importantly, the down trendline connecting the peaks in 2007, 2014 and this past summer. Additionally, the 500-day moving average, which has served as a fairly good line of demarcation between uptrends and downtrends the past 4 years is also in the vicinity of 2.37%.
Also evident on the chart is the absence of a clear intermediate-term trend. For all the talk of a rising rate environment, 10-year rates have sure done very little in the way of rising. At best, rates have gone sideways over the past 4 years. The result is a triangle or pennant formation containing a series of higher lows and lower highs. The break of this pattern could go a long way in determining the next intermediate-term course for rates.
Should the 10-Year break above the present resistance level, it opens up a quick path up to the summer highs around 2.50% (also home to the 61.8% Fibonacci Retracement of the 2014-2015 decline). A breakout above there would signify a higher high in the yield for the first time since the beginning of 2014. Then, perhaps, we can entertain the notion of rising rates.
But first things first... the 10-Year Treasury Yield must overcome the layer of resistance it is currently encountering.
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baltic dry just crashed back under 600...
Just manipulate it lower, it's the easiest thing to do.
what difference does it make ?
technical analysis idiocy.
if you draw the actual trend line across the 2010 and 2011 peaks its already above trend..........so there's that.
the bullshit stock "market" hasn't even noticed. years ago it would crater when the 10y topped 3% but with yellen at the helm i doubt the algoz are worried.
Until societal collapse, the 10y will never be above 3% for more than six months.
Wait till Lucy Yellen pulls the football away again...
10 year going sub 1% before hitting 3%.
This head fake is going to rip many a face off.
but going 2.5 before 0.99
and dow 20k before 15k
2013. 2014. Now 2015. Heard it all before. Not going to happen.
rates will be what the elites want rates to be
bombs will fall where the elites want bombs to fall
gold will be what the elites want gold to be
the news will be what the elites want the news to be
schools will teach what the elites want schools to teach
etc
unplugged;
I sure would like to see the reference to the "Elites", change to something else. ANYTHING other than Elites. Hidden Manipulaters, Invisible State, ANYTHING other than elites. For , none of us consider them "superior". Entrenched , yes.
Rothchilds - Rockefellers - Kennedy clan - Bush clan - Gates - etc
Germany 10y - .62
Japan 10y - .31
Just sayin'
yup - UST 10y could see 1.35, outside chance of 1.15 over next year.
Rising dollar will pressure EM currencies and debt markets (and equities). Most EM debts are denominated in US $. recessionary pressures in EM markets will get worse as those countries/firms have to convert local currency to US $ (which will be vis-a-vis more expensive).
Next year is aligning to be Fugly.
NoVa
There will be no rate hike this year.
there will be a rate hike this year - its a lock
5 basis points
perhaps - its gotta be something - anything - else yellen sheds her bra and all that's left are her industrial strength panties
I will bet all the downvoters "the usual amount"
old school analysis in this 100% corrupt, #bankstersareterrorists is childish
1) deregulate global financial markets
2) deregulate global trade
3) starve off nations, emasculate their ability to prosecute fraud, stop monoploization
4) privatize everything. I mean everything
the IMF, WB, WTO.. the vehicles.
never was commie or tyrants, just good old fashioned Monopolists. inevitable end game state of unbridled wealth consolidation.
P < P + I
Trying to understand treasuries.....I assume articles like this are talking about the 10 Yr Bond in the secondary market. So..... for the yield to rise - the bid must drop. What entity has the most power to drive the bid lower?
faith
Judgement day looms, this line I draw proves it.
That blue broken line on the chart is bullshit. You can draw it anywhere you want.