According to Tim Riddell, Research Analyst at Westpac, a more dynamic rally has developed off 2.71% support for US 10yr Yields and the uptrend looks set to continue towards measured targets in the 3.15%-3.175% area.
Key Quotes
“Daily indicators are beginning to lag the gains in yield and though not turning (yet), the potential of divergence suggests that a period of consolidation might develop.”
“Weekly
- A tight uptrend (off 2.025%) is firmly in place and raises potential for a measured move towards 3.325%-3.35%. Dips are critical and ought to hold above 3.00%
- Weekly indicators are also starting to lag the uptrend, but they remain supportive. The risk of divergence is clear though, highlighting potential for retracements”
“Monthly
- Despite being at levels perceived to be overbought levels, monthly momentum indicators are still pushing higher which suggests an extending uptrend
- A long term base formed in 2016. Multi-decade down-channels are now being breached, opening potential for a pronounced, long term trend of rising yields”