US 10Y TREASURY: heading higherTrade tariffs once again shaped market sentiment during the previous week. The US Administration announced the intent for introduction of 50% tariffs on goods imported from the European Union, which should become effective from 1st July this year. Market immediately reacted to this news, bringing US equities lower, and surging US treasuries. Another news that hit the market and impacted negatively US yields was that the US House of Representatives adopted a tax and spending bill, which is expected to add trillions of US Dollars to the US debt, as analysts are noting. The US has already been downgraded twice by rating agencies, last week by Moody’s, due to high concerns over the sustainability of the US debt.
The 10Y US benchmark reached the highest weekly value at 4,62%, but eased as of the end of the week to the level of 4,50%. This type of swings in the Treasury yields will most probably continue in the coming period. The market is currently extremely sensitive to fundamentals and any news regarding trade tariffs.
US10Y trade ideas
The break-up (a must-watch chart)One of the most important—and unusual—developments in the market right now is the combination of rising US bond yields and a falling US dollar.
Normally, when bond yields go up, the dollar strengthens. It's similar to a high-interest bank account: if you can earn more by holding US assets, global investors tend to pile in, increasing demand for the dollar.
But that’s not what we’re seeing today.
Instead, yields are rising while the dollar weakens—something that’s more often associated with emerging markets facing debt concerns. It signals a deeper issue: despite higher returns on offer, investors are becoming wary of the underlying fundamentals.
In short, **America’s massive debt load and relentless money printing may be starting to catch up—**even with the world’s reserve currency. And the market is beginning to take notice.
This is important to all asset classes moving forward. Keep your eyes peeled on it.
US10Y Technical Breakdown – Post-Moody’s DowngradeMoody’s has downgraded the US credit rating for the first time since 2011, citing rising debt levels and long-term fiscal challenges.
This move sends a clear warning signal about America’s fiscal path and adds fresh uncertainty to markets already navigating interest rates, inflation, and geopolitical risks.
Focus on the US 10-Year Treasury Yield as the market’s pulse on sovereign risk, inflation expectations, and future borrowing costs. Tracking its medium-term trend will provide crucial clues on market sentiment and risk appetite.
Medium-Term Market Analysis
(6-12 Months)
1. Structural Fiscal Risks
This downgrade highlights growing concerns over the US debt trajectory and political gridlock around spending and debt ceilings.
It’s less about an immediate crisis, more about long-term sustainability.
2. Rising Yields and Market Volatility
The 10-year Treasury yield could move higher, beyond 4.60% we could see rates possibly testing previous resistance of 4.80% (Jan 2025) or 5.00% (Oct 2023).
Higher yields mean increased borrowing costs, which can pressure interest-sensitive sectors like tech and real estate and add volatility to equities.
3. Federal Reserve’s Tough Balancing Act
With bond yields edging up, the Fed faces a dilemma: delaying cuts further could risk inflation climbing higher.
However, this downgrade raises the likelihood that the Fed could keep rates higher for longer than many investors expect.
4. Dollar and Capital Flow Shifts
While a credit downgrade may initially pressure the US dollar, its safe-haven status remains strong.
Global capital could increasingly look to alternatives like emerging markets or gold, leading to shifts in international financial flows.
Perspective
While Moody’s downgrade is a serious signal, it’s important to consider:
1) Political Leverage: Sometimes, rating agencies’ decisions can influence political negotiations. This downgrade may add pressure on US lawmakers to reach fiscal compromises. It’s a tool, not necessarily a verdict.
2) US Dollar & Debt Demand Resilience: Despite concerns, US Treasury securities remain the world’s primary safe asset, with global demand still robust. This could temper yield spikes and limit fallout.
Some could view the downgrade as “priced in” to a degree, given ongoing debt ceiling battles and past political brinkmanship.
If true, markets may react less dramatically than feared.
Watch
US 10-Year Yield: Key indicator to watch for shifts in risk sentiment and inflation expectations.
Equities: Prepare for increased volatility; consider defensive sectors and value plays.
Credit Markets: Monitor for widening spreads as risk aversion grows.
Policy Signals: Fed communications and US political developments will be critical catalysts.
This Moody’s downgrade isn’t just a headline, it’s a medium-term signal to recalibrate risk and position for a more uncertain fiscal backdrop.
US 10Y TREASURY: eased inflation expectationsTrade tariffs continue to gain a lot of investors attention, but they are slowly turning to actual macro data and inflation expectations in the future period. Uncertainty over the future impact of imposed trade tariffs of the US Administration is still present, but it becomes evident that investors are becoming tired of reactions on tweets, and are much more switching attention to actual data. The University of Michigan Consumer Sentiment final data for May, posted during the previous week, showed moderately decreased inflation expectations for the period of next five years. Data showed that US consumers are expecting five years inflation at the level of 4,2%, which was also below market estimate of 4,6%.
The 10Y US Treasury yields eased a bit during the previous week, currently testing the 4,4% level. The starting weekly point was at 4,53%. Considering the relatively significant drop during the week, there is some probability for the short reversal during the week ahead, at least till the level of 4,5%. It should also be considered that the week ahead macro data will put in focus jobs data and NFP, which might imply a bit higher volatility.
US 10Y Technical Outlook for the Week May 26-30, 2025 US 10Y Technical Outlook for the Week May 26-30, 2025
Market Recap: Week Ending Friday, May 23, 2025
U.S. Treasuries surged early after President Trump’s X post proposing a 50% tariff on the EU, citing stalled trade talks, sparking a flight-to-safety amid growth concerns and tariff uncertainty. The 10-year note yield fell from 4.54% to 4.45%, and the 30-year bond yield dropped from 5.04% to 4.98%. Markets stabilized after a White House official clarified to CNBC that the remark was negotiating leverage, with no actions implemented. Treasury Secretary Bessent, in a Bloomberg TV interview, downplayed rising yields, suggesting they reflect stronger growth expectations tied to the reconciliation bill. Treasuries ended the holiday-shortened week positively, with yields lower across the curve. The U.S. Dollar Index fell 0.8% to 99.13.
Economic Calendar www.myfxbook.com
The following high-impact U.S. news events are expected to influence financial markets during the period of May 26–30, 2025:
Tuesday, May 27, 2025, the Conference Board’s Consumer Confidence Index will be released at 10:00 AM EST. This index measures consumer sentiment, which significantly impacts USD currency pairs and shapes market expectations for consumer spending and economic growth.
Wednesday, May 28, 2025, the Federal Reserve will release the FOMC Meeting Minutes at 2:00 PM EST. These minutes provide critical insights into the Federal Reserve’s monetary policy and interest rate outlook, significantly influencing USD valuation and overall market sentiment.
Thursday, May 29, 2025, two key economic indicators will be published. At 8:30 AM EST, the second estimate of Q1 GDP growth will be released, serving as a vital measure of economic health and influencing investor confidence and expectations for Federal Reserve policy. Simultaneously, the weekly Initial Jobless Claims data will be reported, reflecting labor market conditions and impacting USD strength and the broader economic outlook.
Friday, May 30, 2025, several significant reports will be released. At 8:30 AM EST, the April Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, will be published, driving expectations for interest rate decisions and significantly affecting USD and financial markets. At 9:45 AM EST, the Chicago PMI for May will provide insights into regional manufacturing activity, influencing market sentiment. Finally, at 10:00 AM EST, the final University of Michigan Consumer Sentiment Index for May will be released, shaping expectations for consumer spending and impacting USD currency pairs.
Technical
Weekly
Following my technical rule I’m expecting previous week low of 4.43% to be targeted while watching 4.382%-4.412% as a possible bounce zone.
Daily
For daily targets I’m watching 4.448% as a possible target of the day and the previous week low of 4.43%. It is also good to note that we are on a possible zone where yield could bounce back. On the high side look at 4.541% Friday high as a possible support.
Watch out for possible news that could affect the market.
DISCLAIMMER: This technical analysis is based on historical chart data, which may not predict future market outcomes. Any insights or interpretations I provide are for informational purposes only and should not be considered investment advice. Please conduct your own research and consult a qualified financial professional before making any investment decisions.
$US10Y and $DXY Divergence and correlation breakdownRecent weeks we might have missed some underlying churn in the market dynamics. Recently there has been a clear visible divergence in TVC:US10Y and TVC:DXY in midst of all the noise about the tariffs. Usually with rising TVC:US10Y yield the US Dollar index TVC:DXY rises with it as visible in the chart below. In this blog we have been following the downward slopping channel in the TVC:US10Y and the yield has remained within this tight range of the channel. In our last blog on 02 May 25 we called for a lower TVC:US10Y @ 4%. Seems that call was incorrect and I was wrong. But in this space, we have been asking for a lower $DXY. The TVC:DXY chart is making lower highs and lower lows and in a verge of a breakdown.
So we have higher TVC:US10Y which is capped to the upside @ 4.6% visible from the upper end of the downward slopping channel and we have TVC:DXY making lower lows but the correlation is broken in the recent weeks as shown in the daily chart below. This kind of unpredictable market behavior it’s difficult to forecast equity market direction. TVC:US10Y seems to create headwind for equities but the lower TVC:DXY is good for risk assets like CRYPTOCAP:BTC , SP:SPX and $QQQ. Hence this push and pull will keep the markets range bound for now.
Verdict : TVC:US10Y currently at top of the range, downside more likely ; TVC:DXY continues to struggle and in penalty box.
US GOVERMENT 10 YEAR BOND YIELD US10Y Among the US Treasury bond yields—2-year (US02Y), 10-year (US10Y), and 30-year (US30Y)—the 10-year Treasury yield (US10Y) generally reflects the strength of the US Dollar Index (DXY) most closely.
Explanation:
The US10Y yield is widely followed by currency traders and investors as a key indicator of market sentiment, interest rate expectations, and economic outlook. It balances short-term monetary policy effects and long-term growth/inflation expectations, making it a comprehensive gauge for the dollar's strength.
The correlation between the US10Y yield and the DXY is strong and positive: when the 10-year yield rises, the dollar typically strengthens, and when it falls, the dollar tends to weaken. This relationship is more consistent than with the 2-year or 30-year yields.
The 2-year yield (US02Y) is more sensitive to Federal Reserve policy changes and short-term rate expectations. While it influences the dollar, its impact is often more volatile and tied to immediate monetary policy shifts rather than broader economic trends.
The 30-year yield (US30Y) reflects long-term inflation and growth expectations but tends to be less reactive to short- and medium-term market dynamics that drive currency movements. It has a weaker and less direct correlation with the DXY compared to the 10-year yield.
Recent market observations (early 2025) show that the US10Y yield movements often lead or move in tandem with the DXY, while divergences can occur but are exceptions rather than the rule.
Summary Table
Bond Yield Correlation with DXY Notes
US 2-Year (US02Y) Moderate Sensitive to Fed policy, more short-term focused
US 10-Year (US10Y) Strong Reflects medium-term economic outlook, best DXY proxy
US 30-Year (US30Y) Weak to Moderate Long-term outlook, less impact on short-term DXY moves
Conclusion
The 10-year US Treasury yield (US10Y) is the best indicator among the three for reflecting the strength of the US Dollar Index (DXY) due to its balanced sensitivity to both monetary policy and broader economic conditions.
#DOLLAR #US #GOLD
US 10Y OUTLOOK FOR THE WEEK MAY 19-23 (UPDATED DAILY)US 10y Treasury Outlook for the Week May 19-23,2025
May 19, 2025
Friday Fundamental Recap
U.S. Treasuries rose, with the 30-yr yield nearing its mid-January peak (5.005%). Gains followed Japan’s Q1 GDP contraction (-0.2%; expected -0.1%) and a strong eurozone trade surplus (EUR36.8 bln; expected EUR17.5 bln). Weak U.S. data—April Housing Starts and May Consumer Sentiment—limited gains and Moody’s U.S. credit downgrade from Aaa to Aa1 on May 16, citing $36 trillion debt, pushed yields higher.
2025 Downgrade (Moody’s, May 16, 2025):
• Immediate Reaction: Treasury yields rose after the downgrade, with 2-year Treasury yields accelerating their climb. This reflects investor demands for higher risk premiums due to perceived fiscal risks.
• Bond Prices: Higher yields correspond to lower bond prices, as investors sell off Treasuries to account for increased risk. The downgrade could lead to further price declines, especially for longer-dated bonds, if yields continue to rise.
• Market Implications: Higher borrowing costs for the U.S. government may exacerbate debt concerns, potentially leading to more volatility. Posts on X indicate expectations of “knee-jerk volatility” and a “risk-off tilt,” suggesting short-term selling pressure on Treasuries.
• Longer-Term Outlook: If investors rotate to defensive assets (e.g., gold), Treasury demand may weaken further, pushing yields higher. However, Treasuries remain the most liquid and relatively safe asset globally, which could limit the extent of yield spikes.
US Economic Calendar for the week
This week's high impact economic news will come on Thursday and Friday while the rest of the week are full of Fed speakers schedules www.myfxbook.com
Technical Outlook
Monthly
We are still trading within the April range and the closest level I could see as draw on yield is 4.59% if the weakness in price continues.
Weekly
Im a bit uncertain of the target for the week provided that we had a big news on credit down grade. If price continues to deteriorate with the news take note of previous week’s high of 4.548% to the monthly range high of 4.59% as a possible target. If market shrugs of the news look at 4.39% to be targeted.
Daily
To recap what I mentioned last Friday… “Its also important to note that market might target the Daily Volume Imbalance starting at 4.412% to 4.382%. If yield closes below 4.382% chances are price could continue to rally further. Also note the fib levels for possible key reversal points.
The news on US credit downgrade, it helped fuel the yield to rebound from our expected reversal zone. For today my bias is for yield to target previous day’s high of 4.497% if market decides to push the price lower on this news else still look at previous day low of 4.39% to 4.548%
DISCLAIMMER: This technical analysis is based on historical chart data, which may not predict future market outcomes. Any insights or interpretations I provide are for informational purposes only and should not be considered investment advice. Please conduct your own research and consult a qualified financial professional before making any investment decisions.
US 10Y TREASURY: US downgradeThere is no rest for US Treasuries. The minute the trade tensions between the US and China were settled, at least for the period of 90 days, a new storm hit the market throughout rising concerns over the sustainability of the US debt. At least as this sustainability is perceived by the rating agency Moody’s, which downgraded the US sovereign rating by one notch late Friday. This news had an negative impact on the investors sentiment, but the most volatility in the US Treasury yields occurred in an after-hours trading on Friday, when the news hit the market.
Regardless of the news about US sovereign downgrade, the higher volatility was evident also during the previous week. The highest surprise came from the University of Michigan inflation expectations, which reached 7,3% for this year and 4,6% in a period of five years. This was higher from the previous estimate and certainly was a reflection of the imposed trade tariffs between the US and China. The highest weekly level of the 10Y US benchmark was 4,54%, however, yields are ending the week at the level of 4,44% in an after-hours trading on Friday. For the week ahead, there is no significant macro data scheduled for a release, however, the volatility might continue, especially on Monday. The reaction on a downgrade news might impose some increase in yields, until the market finds the new equilibrium level. On the opposite side some modest relaxation is also probable, around 4,0%-3,8% level.
The Bond Shark Attack.The bond yield has taken its first dive to the 0.88 level, and according to the ever-so-fishy harmonic shark pattern , we’re bracing ourselves for a dramatic tumble at the 1.138 level.
Now, what does this mean for the stock market? Well, think of it as a domino effect but with a flair for drama.
Investors might start sweating over higher borrowing costs, causing a ripple of caution through equities.
US10 YR Yield Weekly Chart Analysis: NFAUpdate: May 15, 2025
-As per my last update(April 5, 2025) about the gap between March 24th candle and March 31st candle that any candle body close above that gap will invert that gap from resistance to support and Upside target will be Jan 13, 2025 candle High
- We had a candle body close above that gap and now its acting like support.
-Now i am expecting the bullish trend to continue and long term upside target is Jan 13, 2025 candle High and Short term upside target is April 7, 2025 candle high
US10 YR Yield Weekly Chart Analysis: NFAUS10 YR Yield Weekly Chart Analysis: NFA
-After sweeping the previous swing high we retraced back to 50% Fib(Equilibrium)
-Expecting this Week's candle wick to sweep Sellside Liquidity-1 and bounce
-If we bounce from here, iFVG-W (red rectangle) will be our resistance zone
-Rejection from that level can send it back to sellside and our next target will be BISI-W(green rectangle)
If any of these Support/Resistance levels are invalidated i will update the idea next week.
**Major economic events can cause drastic moves and invalidate these levels**
"The President wants lower rates"On February 5th we heard the following from US Treasury Secretary:
“The president wants lower rates,” Bessent said in an interview with Larry Kudlow, “He and I are focused on the 10-year Treasury and what is the yield of that.”
Bessent has further stated:
“He wants lower rates. He is not calling for the Fed to lower rates,” Bessent said. Trump believes that “if we deregulate the economy, if we get this tax bill done, if we get energy down, then rates will take care of themselves and the dollar will take care of itself.”
“We cut the spending, we cut the size of government, we get more efficiency in government, and we’re going to go into a good interest rate cycle,” Bessent said.
Currently, the bond market is calling BS on the above.
IMO the only way the bond market will come down meaningfully is if and only if there is fiscal responsibility. At some point the government will understand what the bond market demands...until then we will stay higher for longer. I would not be surprised at all if the 10 year hits 5.3% this year.
A doubling of the move in the lower orange box should not surprise anyone....that puts the 10 year somewhere in the 5.4% range. IMO anywhere between 5.3 and 5.6 is certainly possible and maybe even probable.
US 10Y TREASURY: tariffs negotiationsAnother rollercoaster of US Treasury yields calmed down after the FOMC meeting held during the previous week. As expected, the Fed did not make any changes to the current levels of interest rates. However, in case that trade tariffs cause some harm to the US economy, the Fed is in position to react swiftly. The economy is still growing at a solid pace, as Fed officials see it, and the jobs market is relatively strong while the inflation is still on the target to reach gradually 2% in the coming period.
The 10Y US benchmark yields reached lowest weekly level at 4,26% and moved to the higher grounds in the after FOMC meeting trading. They have closed the week at the level of 4,39%. Markets will spend the week ahead by digesting the latest economic data and also April inflation which is due for the release on Monday. However, the US-China trade tariffs negotiations are expected to start soon, which might bring again some higher volatility and nervousness among investors and traders on the market. As per current charts, some relaxation in the 10Y yields is quite possible, however, the impact of news related to negotiations could impact moves to both sides.
US 10Y Monthly, Weekly and Daily Bias(note ill be using the charting tool Trading view for faster annotations for multi-timeframe analysis)
A. Please check relevant US Economic news that might influence price action {eco us }
May 13 US Cpi & Inflation day
May 15 Jobless Claims, Retail sales, PPI, Empire Mfg Index, Fed Powell Speech
May 16 Housing Starts
you may also access in the web and filter the high impact news feed (www.myfxbook.com)
B. Monthly Range
Price action is currently confined to April range high of 4.59% and range low 3.86%
C. Weekly Range
My Bias for the week is to target 4.43% possibly 4.489% if yield starts trading below 4.262% our bias would change.
D. Daily Bias (May 12) will try to update this daily
Previous day high has already been mitigated and I'm more biased to say the first weekly old high's 4.438% will be targeted
US10Y - Yield Volatility Amid Fed Policy StanceThe 10-year Treasury yield fluctuated between 4.30% and 4.39% this week, closing at 4.382% on May 9.
The Federal Reserve maintained benchmark rates at 4.50%, dismissing pressure from the Trump administration for cuts. Chair Powell emphasised persistent inflationary risks and labor market stability, reinforcing a cautious "higher-for-longer" stance.
4.400% intermediate term buyside liquidity is a point of interest going forward.
The Long, Flat Road AheadWith the Federal Reserve’s rate decision in focus, I wanted to revise a previous idea that called for 6% on the 10 year T-bill, and provide a clearer read on what I’m seeing as the larger trend, which could provide important clues for the future of everything from monetary policy, to mortgage rates, and stocks.
Starting with the 500R chart, I think we are seeing a clear flat correction form, with the current segment of the trend being Wave C of (B). In a flat correction, the endpoint of (B) should reach at least 100% of (A). It can also extend further or, in less common cases, only reach 90% of (A), however for the purposes of this idea I will assume the yield will retrace to the 100% level, which is just above 5%.
If this were to play out, it would suggest incoming pressure to financial markets that will eventually subside, likely later in the year. Something else to look for is that if this (B) wave were to fit a Zig Zag structure, that would cause waves (A) and (B) to be of the same pattern, so we should anticipate an alternate pattern in (C), such as a flat, diagonal, or triangle.
The question on everybody's mind at the moment is if/when the next interest rate cut is coming. For today's announcement, I expect there to be no surprises, which can also be supported by short term technicals.
Looking at the 100R chart (right) and Daily chart (left) at the same time provides useful context. The yield bounced off the 0.618 retracement of the 4/4 - 4/11 rise (labeled as 0.382 on the fib extension) and should have upward momentum. On the contrary, the Daily chart shows resistance at what appears to be a more well-defined lower high, with imbalances below. On the 100R chart, I also have a box drawn to show the extremities of the 500R bar. I expect the yield to move higher without creating a new 500R bar - which means the max low would be just below 4.10%.
A retracement to this level would lead to the yield hitting the middle line of the lower imbalance, which should be a key liquidity zone. From there, a move to the 1.618 extension would take the yield to the targeted 5%.
Something else I look for when detecting reversals is divergence on the Fisher Transform oscillator. I have it on both charts, which suggests a near-term move to the downside. Divergences are even more reliable on the Range charts, so a slightly lower low on the yield occurring while Fisher makes a higher low would signal that yields are about to rise higher.
Assuming we see similar action play out, this would support my fundamental prediction that FOMC will temporarily provide relief to the markets - possibly from there being no surprises or dovish comments on rate cuts. I would, however, expect this to be short lived. Since I am already calling for stocks to be near a major reversal level, I expect a sharp rise in bond yields to correspond with a more powerful sell off of stocks than what we saw in February-April. More likely catalysts could be hot CPI and/or failure of US/China trade talks.
Since there isn't much left to comment about on the technical side of things, I'll leave it at that. I ultimately expect the yield to start moving to 5%, so if it starts moving higher from here (4.36% currently), it would invalidate the idea that this will make one more push lower this week. We'll see what happens. Thank you for reading and let me know what you think!
Will The FED cut rates? Maximum employment & stable prices were the choice of words from Jerome Powell last meeting addressing the economy.
While the headline Personal Consumption Expenditures (PCE) price index rose by 2.3% year-over-year in March 2025, the core PCE, which excludes food & energy, increased by 2.6%. Additionally the NY Fed's multivariate core trend suggests underlying inflation may be closer to 3.0%, indicating persistent inflationary pressures.
The April jobs report showed stronger than expected job growth, with unemployment remaining steady at 4.2%. This robust labor market reduces the urgency for immediate rate cuts.
Recent tariff implementations have contributed to rising inflation expectations, with a one year outlook projecting 6.5% inflation. This complicates the Fed's decision making, as cutting rates amid rising inflation expectations could undermine its credibility.
Now let's zoom out to June 2025 the probability of a rate cut at the June meeting has decreased to 37% following strong economic data.
My Chart gives a great outlook on rate cut possibilities and how we can take an overall outlook on the economy based on 10 yr Government Bond. I was able to add in a few important dates along with starting & ending points of rate cuts throughout those time frames. I did not include all the rate cuts in between. However, it can still serve as a great indicator moving forward. I hope this helps and let's hope for the best in our economy moving forward.
US 10Y TREASURY: rollercoaster, againMarket movements in a previous period are clearly showing how high uncertainty is currently among market participants. The US Treasuries for one more time took the downtrend during the previous week, clearly testing the 4,2% level with 10Y US benchmark, but Fridays better than expected jobs report, was a trigger for a move back toward the higher grounds. The lowest weekly level of 10Y yields was 4,13% on Thursday, however, the rest of the trading week the market was looking at the upside. The strong move up, brought the 10Y yields toward the level of 4,30% where yields have closed the trading week.
The volatility might continue also during the week ahead. The FOMC meeting is scheduled for May 6-7th, while on Wednesday will be the interest rate decision day, and also Fed Chair Powell's address to the public. As per current market expectations, as posted by the CME Group FedWatch Tool, the Fed could leave interest rates unchanged at this meeting, considering stronger than expected jobs data posted during this week. In addition, the market is expecting that the Fed will not change interest rates until their meeting in July. At the same time, analysts are noting that it is too early to see the reflection of trade tariffs in real economy, concretely in jobs data, in which sense, they are taking precaution with current strong jobs data. In this sense, the Fed Chair Powell's speech, after the FOMC meeting will be closely watched by markets, for a standing of Fed on the current state of the US economy as well as their view on tariffs repercussions in the future period.