From Naufal Sanaullah’s Shadow Capitalism, a look at the latest 10-year yield action, and where it stands with regard to historical trends.
10yr yields are back to levels prior to yesterday’s terrific auction, and I expect yields to continue
higher from here. With each bout of risk aversion, USTs get a bid, but I am considering these dips
to be bought on a secular/structural basis/timeframe. Indeed, a break through the 400bps
resistance level is bearish Tsys on multiple timeframes, and could mark the end of the secular bull
market for USTs that has persisted for almost three decades. Be watching the 150 month moving
average, as it has provided excellent long-term support and resistance in 10yr yields. It is currently
sitting just above 440bps. A breakout could see yields flying much higher.
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