Chart of the day: It’s not reflation without higher bond yields
The move lower in US10Y in the past few sessions has been the talk of the town in the finance industry, especially after all the rigmarole caused in the market by the rapidly rising yields over the past few weeks.
With US10Y testing key support at 1.60 – 1.62 the question that the market’s wanted answered is whether we see yields bounce from key support, or whether we take out key support and continue to counter trend grind lower.
It was an important question to ask due to the impact that the move in something like US10Y can have on the Dollar, Gold and the JPY. The grind lower in US10Y this week saw Gold push back into a key level of resistance in 1760 and USDJPY revisit key support at 109.30.
So far, it seems like US10Y has been able to hold the first test f key support. That of course doesn’t mean the move will just be straight line higher from here as we could still test lower again and could even break support.
However, in line with the balance or probabilities and the path of least resistance we would expect US10Y to grind higher in the weeks ahead. Attention now for US10Y in the short term turns towards today’s PPI numbers for the US.
With US10Y testing key support at 1.60 – 1.62 the question that the market’s wanted answered is whether we see yields bounce from key support, or whether we take out key support and continue to counter trend grind lower.
It was an important question to ask due to the impact that the move in something like US10Y can have on the Dollar, Gold and the JPY. The grind lower in US10Y this week saw Gold push back into a key level of resistance in 1760 and USDJPY revisit key support at 109.30.
So far, it seems like US10Y has been able to hold the first test f key support. That of course doesn’t mean the move will just be straight line higher from here as we could still test lower again and could even break support.
However, in line with the balance or probabilities and the path of least resistance we would expect US10Y to grind higher in the weeks ahead. Attention now for US10Y in the short term turns towards today’s PPI numbers for the US.