Benchmark Treasury yield remains on a run
U.S. equity index futures mixed; Nasdaq 100 up ~0.3%
Euro STOXX 600 index off ~0.5%
Dollar dips; bitcoin off >2%; crude up; gold up >1.5%
U.S. 10-Year Treasury yield rises to ~4.46%
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BENCHMARK TREASURY YIELD REMAINS ON A RUN
The U.S. 10-Year Treasury yield US10YT=RR resumed its climb last week amid the increased possibility that the Federal Reserve could pause cutting interest rates at next month's policy meeting.
The yield bottomed at 3.599% on September 17, which was one day ahead of the Fed's 50-basis-point, jumbo rate cut on September 18, and it now appears that the correction down from the October 2023 peak troughed-out ahead of the 3.25%-3.22% target zone.
It's been pretty much straight up since that Fed cut, with the election of Donald Trump adding to gains; the yield has risen eight out of the past nine weeks.
And the case for a greater advance on the charts remains underpinned by the fact that the 10-year yield has reclaimed the weekly Ichimoku Cloud.
That said, the yield has been struggling to overwhelm the resistance line from its October 2023 high, which now resides around 4.42%:
However, on Monday, the yield is rising to about 4.47%, which puts it just shy of Friday's 4.505% intraday high.
On a thrust above 4.505%, the yield will face its May 2024 high at 4.638% followed by its April 2024 peak at 4.739%.
But given what appears to have been a longer-term trend inflection in March 2020 to the upside, ultimately, the yield's 5.021% October 2023 high should give way.
The yield would now need to see a weekly close back below the Cloud, in the 4.36%-4.33% area, to suggest it was on the back foot again.
Initial support would be at the 200-day moving average, which is now at about 4.20%, while the 50- and 100- DMA's are now just over 4.0%. The October 16 low was at 3.995%.
(Terence Gabriel)
*****
FOR MONDAY'S EARLIER LIVE MARKETS POSTS:
SHELL, BESI, ASTRAZENECA IN BARCLAYS' 14 HIGH CONVICTION EUROPEAN STOCK IDEAS - CLICK HERE
EUROPE'S U.S. LOCAL GOODS EXPOSURE COULD HELP OFFSET TARIFFS - CLICK HERE
WILL AMERICA MAKE LUXURY GREAT AGAIN? - CLICK HERE
STOXX WAVERS AROUND PARITY - CLICK HERE
EUROPE BEFORE THE BELL: QUIET START TO THE WEEK - CLICK HERE
BOJ OPEN TO TIGHTENING, MUM ON TIMING - CLICK HERE
10YY11182024 https://tmsnrt.rs/3YRhaU1
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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