Yesterday we witnessed an important movement on Government Bonds, the enlargement of the curve, should be a clear signal to the market. Our expectations are for an increase of up to 2.5%.
If our analysis is correct, this should have a significant impact on the equity, then SP500 . If the NFP due out tomorrow will be more expectations, we should see a negative impact on the Future, and could be the beginning of a serious pullback (correction) of between 8% and 10% ( SP500 ).
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The safe haven German Bunds' 10-year yields touched 0.535%, the highest since January. This led to a rise in the Treasury yields, sending 30-year bond yield to 2.934%, the highest in five months. Treasury prices on Wednesday were also under pressure from big sales of bonds by highly rated Apple and Anglo-Dutch oil giant Shell. The rise in the Treasury yields was somewhat curbed by short-of-forecast US ADP employment report and worker productivity, which could discourage interest rate hikes in the US. Currently, the 10-year yield is trading at 2.236% and the 30-year yield is trading at 2.976%.