Previous string of ideas has been invalidated following last week's price action.
The US 10-year yield completely crashed through the support at 4.40% last week following a host of strong data prints from the US coupled with a wave of risk-off investor sentiment stoked by Trump’s tariff fears which had investors rushing to the safety of US treasuries. Could Trump’s hardline tariff stance perhaps be a way to create demand for US debt?
Technically the yields have now dropped into oversold territory which strengthens the support between 4.13% and 4.17% however continued volatility in the equity markets will allow the US treasury market to attract more interest which could allow for a deeper move towards the 38.2% Fibo retracement at 4.04%.
The headlining events for this week is the ECB interest rate meeting and the NFPs for February. Market expectations are for the ECB to cut rates from 2.9% to 2.65%. The ECB has held a more dovish stance than the Fed since the rate cutting cycle began and if it’s more of the same on Thursday, I expect the US 10-year yield to find more demand to hold onto levels below the critical 200-day MA at 2.43%. Most of the focus will however be on the US non-farm payroll print for February. The NFPs print for January came in slightly lower than expected and another weak print on Friday will have investors question the validity of Powell’s statement that the US economy is strong and that the Fed is in no rush to cut interest rates. A weak NFP print will thus be positive for the US treasury bulls.
The US 10-year yield completely crashed through the support at 4.40% last week following a host of strong data prints from the US coupled with a wave of risk-off investor sentiment stoked by Trump’s tariff fears which had investors rushing to the safety of US treasuries. Could Trump’s hardline tariff stance perhaps be a way to create demand for US debt?
Technically the yields have now dropped into oversold territory which strengthens the support between 4.13% and 4.17% however continued volatility in the equity markets will allow the US treasury market to attract more interest which could allow for a deeper move towards the 38.2% Fibo retracement at 4.04%.
The headlining events for this week is the ECB interest rate meeting and the NFPs for February. Market expectations are for the ECB to cut rates from 2.9% to 2.65%. The ECB has held a more dovish stance than the Fed since the rate cutting cycle began and if it’s more of the same on Thursday, I expect the US 10-year yield to find more demand to hold onto levels below the critical 200-day MA at 2.43%. Most of the focus will however be on the US non-farm payroll print for February. The NFPs print for January came in slightly lower than expected and another weak print on Friday will have investors question the validity of Powell’s statement that the US economy is strong and that the Fed is in no rush to cut interest rates. A weak NFP print will thus be positive for the US treasury bulls.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.