-Current 10y levels have finally crossed over the trend-line going back to July – strong near-term indicator is broken which suggests 10y support at/above 2.40%.
-Interestingly, the ~2.40% yield level is the .618 Fibonacci level which we have also crossed over – this is a key Fib level which also indicates support at 2.40% with the next at ~2.47% or the .764 Fib level.
-The ECB cannot be discounted either as any meaningful uptick in European rates will likely help push US rates even higher.
Target: US 10y at or above 2.5% by the end of the year.
It recently printed -64bp.
If we assume Trump's target GDP growth of 3% and the FED's 2% inflation target, then a 5% nominal GDP target places the 10y yield at 3%+ (approx around 3.5%).
My update would be that since we broke above the 2.47% Fib line, this will most likely act as a support in the near-term. I still believe looking at the pace of the 5s30s flattening over the last year, in 2018 we will see a flatter curve and possible an inverted curve by 2019.