10-year Treasury yields were back above 4% in early trading Monday.
US10Y is back above 4 percent
It’s been a bit of a perfect storm for bonds:
- Inflation expectations rise as oil prices rise
- Better than expected US data combats recession fears (this should not be a fear but anyway)
- Significant repricing under unrealistic expectations of significant discounts
Although all of these things lead to support yields rising and bonds falling, there is a chart that needs bond selling on the radar here.
The 2s10 is back at 0.0%, and I expect bond buyers to battle it out around that area. If you look at that, that puts the ZB around the 121’17 mark which is also the low from August 8th.
I think this will be a major support for bonds to watch.
2s10s
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