Technical Analysis

The bid in bonds is not letting up

10-year Treasury yields sink below 1.30%

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The bond market continues to flash a warning sign to the rest of the market as we now see 10-year yields sink below 1.30% to its lowest since February.

The retreat since the FOMC meeting in June has been rather swift and remarkable, considering the fact that most still view that the Fed is slowly tilting towards being more hawkish. As such, this is an ominous sign when weighed against that outlook.

The technicals tell more of the story here and the 200-day moving average @ 1.227% is the next key level for yields.

This is posing so many questions with regards to inflation and the Fed and it is getting harder and harder to ignore by the day.

The latest downdraft in yields so far is stirring up some nerves as we see more of a risk-off tilt to start European trading with the yen higher and commodity currencies being punished, with the aussie and kiwi leading losses now.

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