“US Treasury yields are on the verge of basing and resuming their long term bear trends, warns BofAML’s MacNeil Curry, as Treasury volatility (MOVE Index) appears poised for a reversal higher…
Via BofAML’s MacNeil Curry,
Treasury yields poised to base
US Treasury yields are on the verge of basing and resuming their long term bear trends. While we need to see a 10yr yield close above 2.568% to confirm, we reiterate our comment: THE LONG-TERM BEAR TREND IS POISED TO EMERGE FROM HIBERNATION. While such a turn would be supportive of our bullish US $ view against the likes of € and CHF (we are long the US $ against both) , it should also help push many $/EMFX pairs higher as well. The reason being is that Treasury volatility is also poised for a significant turn to the topside. Indeed, a turn higher in US yields should be the catalyst for such a turn in vol. In such an environment, $/ZAR is particularly well placed to benefit as it has just resumed its long term bull trend.
Chart of the week: 10yr Treasury yields at the basing zone
US 10yr Treasury yields have reached the 2.420%/2.346% basing zone. From this zone we look for a base and resumption of the long term bear trend…”
Jeremy Siegel expects bond yields to rise if data comes in stronger
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