US 10Y Yields - Chasing Lower YieldsAssessing the weekly range, from low to high, it is clear to me that the yields is still trading in a premium and with major liquidity pools attacked to the upside, it's only a matter of time we see a cooldown period.
Below 4.469% is regarded as a discount and it might take several of weeks to pan out but I would like to see the weekly bearish consequent encroachment @ 4.735% respected with 4.809% being the last line of defence.
US10Y trade ideas
US10Y will turn bullish on its 1D MA50.The U.S. Government Bonds 10YR Yield (US10Y) has been trading within a Channel Up pattern since the September 17 2024 Low and is currently on its Bearish Leg. This is now approaching the 1D MA50 (blue trend-line), below which the last Higher Low was priced that initiated the Bullish Leg.
With the 1D RSI approaching the same level as then, this is the ideal level to go long again and target 5.000%, which is just below the October 23 2023 Resistance.
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US10Y afternoon analysisTechnical analysis for US10Y.
This count is looking for one more push up in yields, approaching (but not going above) 5.215%. Median line is target.
This would complete an expanded flat that started in 2012.
This analysis would suggest the end of the bond bear market is approaching, as long as 5.215% holds as resistance. Yields above 5.215% would suggest much higher yields are likely.
Yields below 4.505% before move above 5% would also invalidate this count.
US 10Y TREASURY: a FOMC weekThe previous week was a bit mixed for US Treasuries. Certainly, the most important weekly event was related to the inauguration of the new-old US President. The market was closely watching which pre-election promise will take place in the coming period. For the moment, promised tariffs on imported goods are set aside, so fear of potential inflation was a bit postponed. However, a new moment occurred when the President was addressing a business gathering in Davos, Switzerland, when he noted that he will request a drop in interest rates, immediately. Taking into account that decrease of interest rates is the responsibility of the FOMC in the US, this move from the US Administration currently remains unclear.
The 10Y US benchmark yields started the previous week around the level of 4,52% and moved up toward the level of 4,66%. At Friday's trading session, Treasury yields eased till the level of 4,61%. The week ahead brings the FOMC meeting on January 28-29, which is a promise of a potential volatile week. The “rejection” of the 4,65% level at Friday's trading session, implies a probability of a further decrease in Treasury yields, but not below the 4,55% level. On the opposite side, in a FOMC week, surprises are always possible.
US10YU.S. 10-Year Bond Analysis – Short-Term Dip, Long-Term Rise
Trump's tariff strategy isn't just about trade; it's also a tool to pressure the Fed into lowering interest rates. He frequently emphasizes the need for lower rates, aiming to weaken the dollar and stimulate economic growth.
In the short term, this pressure could push bond yields lower. However, in the bigger picture, other macroeconomic forces suggest a longer-term uptrend.
For now, I see a temporary bearish move with two possible scenarios:
Plan A (More Likely): A drop confirmed by breaking 4.59, targeting 4.41, followed by a rebound towards 4.86 and 4.94.
Plan B: A corrective dip from around 4.71.
Despite short-term weakness, the broader trend remains bullish.
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BitCoin doesn’t understand the dark of the night during the dayBased on the performance of U.S. and Japanese stocks yesterday, the logic behind the Japanese interest rate hike is as follows: Previously, with low interest rates in Japan, people borrowed yen, exchanged it for dollars, and invested in U.S. stocks. So, when Japan raises interest rates, it reverses this process—liquidity flows back to Japan, the dollar weakens, U.S. stocks decline, and Japanese stocks rise. As shown in the chart, the candlestick represents the U.S. 10-year Treasury yield, and the blue vertical line marks the period of yesterday's movements in U.S. stocks, Japanese stocks, the dollar, and the yen. Therefore, Bitcoin, during the day, follows the rise of Japanese stocks, but at night, follows the decline of U.S. stocks. It’s truly like what the northeastern woman sings: "You don’t understand the dark of the night during the day."
US10Y: Buy signal on the 1D MA50.The U.S. Government Bonds 10 YR Yield is neutral on its 1D technical outlook (RSI = 54.381, MACD = 0.046, ADX = 33.861) as it is on a bearish wave insde the long term Channel Up pattern. The last HL bottom was priced on the 1D MA50. That is the most efficient buy entry to target the 4.0 Fibonacci extension (TP 5.100).
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US 10Y Yields - Is 5% Yields A Real Possibility? Happy new year traders!
This is a perfect time to do a review on Government Bond Yields as it's the 1st month where you see the beginnings of the 6-Month candle form, which can be very powerful for gauging a bias.
Here, we look into the technical and psychological elements as to why 5% might not be as soon as you think...
US 10Y TREASURY: not so scary inflationDuring the previous period, the 10Y US Treasury yields were heading toward the 4,8% level, in a fear of potential higher inflation in the US supported by the strong jobs market. However, posted inflation figures during the previous week, showed that the inflation level in December was modestly below market estimate. This was a sign for the market that the Fed might actually pursue with a planned two rate cuts during the course of this year. In this sense, Treasury yields tumbled down, toward the lowest weekly level of 4,57%. Still, they are ending the week at the level of 4,62%. In addition to a slowdown in inflation, a note from Fed Governor Waller that the Fed might cut multiple times this year, further cooled down the Treasury yields.
It could be expected that the markets will continue to consolidate in the coming period, after the inflation figures showed that there is a decreasing trend, regardless of a strong jobs market. However, there is still a day to watch on Monday, January 20th, where an inauguration of a new US administration will take place. There is some probability for a higher volatility on this day, but still, it could not be expected for some higher moves to either side.
Are We Forming A Top On The US10YR?It looks like we may be forming a top on the US10YR. I assume there will be some volatility in the first few months with the new Trump administration. Trump went on record saying that rates are currently too high. His last term in 2017, it took rates about 5-6 months to come down. Will this time be faster?
Bitcoin (BTC) vs. US 10-Year Treasury Yield AnalysisKey Dynamics:
Rising inflation has pushed the US 10-Year Treasury Yield (10YR Yield) higher, creating macro headwinds for Bitcoin as rising yields often reflect tighter financial conditions and increased risk aversion.
Despite this, Bitcoin has shown resilience, maintaining an upward trend in its price action.
Current Setup:
10YR Yield Resistance Zone:
The 4.70%-5.00% range is a critical resistance zone that has capped yields in the past.
A rejection at this level would signal easing inflation concerns and a potential stabilization in financial conditions, supporting BTC's bullish trajectory.
Breakout Scenario:
If the 10YR Yield breaks above 5%, it could signal further inflationary pressures or expectations of higher interest rates for longer.
This would increase the opportunity cost of holding non-yielding assets like Bitcoin, potentially weighing on BTC's price.
Implications for Bitcoin:
Bullish Outlook:
A rejection at the 10YR Yield resistance, combined with improved inflation control, could act as a tailwind for BTC, enabling it to continue its upward momentum.
BTC’s trajectory could also benefit from a rotation of funds into risk assets as financial conditions stabilize.
Bearish Risks:
A breakout above 5% would likely put downward pressure on BTC, potentially leading to a period of consolidation or retracement in the face of macroeconomic uncertainty.
Key Levels to Monitor:
10YR Yield:
Resistance at 4.70%-5.00% and the significance of a potential breakout or rejection.
BTC Support and Resistance:
Short-term support: $91,000-$93,000.
Resistance: $102,500-$105,000.
Conclusion:
Monitoring the interaction between the 10YR Yield and Bitcoin's price action is critical. While BTC's upward trend remains intact, a rejection in yields near 5% could strengthen bullish momentum, while a breakout above this level may present challenges. Upcoming economic data will play a significant role in shaping both the yield curve and BTC's trajectory in the near term.
US 10yr Yields Eyeing 5%?Chart Analysis:
The 10-Year US Treasury Yield continues to climb within a well-defined ascending channel, highlighting robust bullish momentum in recent months.
1️⃣ Ascending Channel:
Yields are trading near the upper boundary of the ascending channel (green-shaded area), reflecting sustained upward pressure.
Traders should monitor reactions at this boundary for potential breakout attempts or a pullback toward the channel’s midline.
2️⃣ Key Resistance Levels:
4.80%: Immediate resistance level, capping recent gains.
5.02%: A critical horizontal resistance zone, representing a multi-year high and potential target on continued strength.
3️⃣ Moving Averages:
50-day SMA (blue): Trending upward at 4.33%, providing dynamic support.
200-day SMA (red): Rising at 4.24%, reinforcing the broader bullish trend.
4️⃣ Momentum Indicators:
RSI: At 75.68, signaling overbought conditions, which may precede a consolidation or corrective pullback.
MACD: Bullish momentum remains strong, with the MACD line above the signal line and in positive territory.
What to Watch:
Sustained breaks above 4.80% could pave the way for a test of 5.02%, with potential for further upside if this resistance fails.
Any pullback may find support near the 50-day SMA or the ascending channel’s lower boundary.
RSI overbought conditions suggest vigilance for potential divergences or reversal signals.
The 10-Year Yield’s bullish structure remains intact, supported by rising moving averages and upward momentum. However, caution is warranted as yields approach critical resistance levels.
-MW
US 10Y TREASURY: surprise, surpriseThe US jobs data posted during the previous week was the highest surprise for markets in the recent period. The US economy added 256K new jobs in December, which was much higher from market expectations. At the same time, the unemployment rate dropped to the level of 4.1%. Certainly, such developments are positive for the US, however, investors were not happy. A strong jobs market and a too strong US economy will make the Fed halt further cuts of interest rates. Some analysts already came up with their predictions that the first rate cut in 2025 might occur in September. For other analysts it is questionable whether the Fed will cut even once in 2025. Whatever these initial expectations, still the FOMC meeting is scheduled for January 28th, where more information will be available and further priced.
The US 10Y benchmark yields reacted strongly to jobs data on Friday. Yields reached higher grounds, at 4,76%. At one moment, yields reached the level of 4,8%. Yields returned to the levels from April last year. Until the January FOMC meeting, it could be expected that the market will continue to test levels around the 4,8%. However, the picture will be much clearer after the inputs from Feds officials. Hopefully, there will be no more surprises.
10y+ bonds are becoming even more attractive for investorsThe US economy in December added the most jobs since March and the unemployment rate unexpectedly fell, capping a surprisingly strong year and supporting the case for a pause in Federal Reserve interest-rate cuts.
Nonfarm payrolls increased 256,000, exceeding all but one forecast of economists. The unemployment rate fell to 4.1%, while average hourly earnings rose 0.3% from November.
YIELDS are rising, and traders are fully pricing in the first rate cut in October. The 10-year yield may aim for the 5% level, similar to the March 2023 movement. However, let's not forget that at that time the interest rate was 5.5%, and there were no expectations for combating 9% inflation.
Currently, inflation is even below 3%, and concerns that the US will impose new sanctions or that tax cuts will create a new wave of inflation are purely speculative fears, not facts, which have created an emotional backdrop in the markets.
On the contrary, 10, 20, and 30-year bonds are becoming even more attractive for investors.
And don't forget, pre-election promises often do not turn into reality.
1Q2024 outlook pre-December NFP'sBack in December before the November non-farm payroll print, the US 10-year yield was sitting just below the 4.20% which coincided with the 50- and 200-day MAs. Since the stronger than expected payroll print of 227 thousand, yields have spiked aggressively to highs just above 4.7% earlier this week. (See the attached idea from December)
It is difficult to gauge how the payrolls will affect the US bond market today but I still believe the US 10-year yield will reach the 2023 highs of 5% given the strong upward trend. The turmoil in the UK gilt market also does not bode well for investor risk sentiment as we may be witnessing a historic resurgence of the so called bond vigilantes.
Over to the technical indicators, a short-term pullback towards the 50-day MA at 4.41% and the zone between 4.45% and 4.50% seems like the next move following today’s payroll print. The US 10-year seems a bit overstretched and the RSI indicator is hinting at a bearish divergence. This will however just be a short-term pullback and as long as we remain above the 50-day MA, a 5.00% yield on the 10-year seems inevitable.
2024 review and where to from here for US10yRisk-off sentiment doesn’t seem to last long in this current market despite all the geopolitical tensions, election volatility and inflation fears we witnessed this year. In spite of all the volatility and the odd carry trade squeeze the SPX is set to end the year up more than 25%, its second year on the trot of more than 20% gains. Never the less the US10 is on its way to close the year down roughly 4.5%. Meanwhile gold, a risk-off asset similar to US long-term treasuries, touched fresh all-time highs in October at $2,792 per ounce, up almost 30% year-to-date, and bitcoin (regardless whether you see it as a store of value, casino capitalism coin or a reserve asset) is up 125% year-to-date.
The US 10-year yield was off to the races in the first four months of the year off the back of elevated inflation and modest US labour market growth which saw yields climb to highs of 4.7%. 10-year yields however turned at the end of April after US CPI topped out at 3.5% in April while the US unemployment rate continued to tick higher.
I initially expected treasuries to continue their sell-off in the 2Q2024 and the US 10-year yield to break above the April high of 4.7% to complete another wave higher towards 5.0% however the forward guidance from the Fed coupled with their self-proclaimed victory against inflation ultimately pushed bids for bonds. Additionally, in June the ECB, BOE and other major central banks started front running the Fed with their rate cuts which strengthened the demand for treasuries and the dollar. The failed break above 4.5% in July coupled with the US unemployment rate topping out at a rate of 4.3% let the bond bulls loose.
Yields continued to slide rapidly in the 3Q2024 until Japanic Monday on the 5th of August when the carry trade squeeze scorched short positions on the Japanese Yen after the BoJ’s surprise rate hike. Bond bulls managed to pull the yield down to a low of 3.6% before the Fed’s 50bps rate cut unexpectedly halted their run.
Counter intuitively, longer-term yields have been rising since the Fed started cutting the federal funds rate. The Fed controls the short the short-end of the yield curve and with the Fed cutting rates coupled with the treasury sell-off, the market finally saw the normalization of the yield curve which has been inverted since July 2022!
So, where to from here? The conclusion of the US election results saw treasury yields come off of their highs of around 4.5% but the current sell-off may still have legs if the bond vigilantes see another bout of inflation on the horizon. Additionally, the Fed has indicated that they are in no hurry to cut rates, opting for a more hawkish stance. The last non-farm payroll print will be released on Friday which may give some technical direction for yields heading into 2025.
A break below the 200-day and 50-day MA around 4.2% will allow yields to drop back below 4% as we head into the New Year. My prediction is however for a re-test of the 2024 high at 4.7% early in 2025. A break above the 61.8% Fibo level of 4.3% will be an early indication of this move. In terms of technical indicators the RSI still has room to move higher and is close to oversold ranges while a cross of the 50-day MA above the 200-day MA will signal a golden cross. Additionally the impulse wave following the Fed rate cut was very strong which signals to me that we are current seeing a bullish pullback in yields (bearish for bonds).
US10Y afternoon analysisTechnical analysis for US10Y.
Bearish on long-term bonds, this analysis has yields continuing to go up.
Displayed count has A wave beginning off 9 March 2020 low, completed 23 October 2023. B wave as completed zigzag to September 17 2024 low.
C wave count in wave 3 of 3, with targets of 5.337% and 5.592%. This count shows C wave completing at top of pitchfork (drawn off 9 March 2020 low), but with measured move I would expect the C wave to complete north of 6.496%.
Key supports: 4.507% and 4.126%
Key resistances: 4.739% and 5.021%