US 10-year yields to finish week above 2.40%
For me, the 10-year yield is most important metric in markets. It touches everything and affects everything.
It’s also the most-powerful signal and that includes technicals. Earlier this year, the failure at 2.40% foreshadowed a dip in the US dollar from July through early September. Before that, the failure at 2.65% also preceded a dollar slide.
Now things are moving in the other direction with yields above 2.40%. It’s a level Bill Gross recently said would indicate the end of the generation bull market in bonds.
Part of the story is anticipation about Taylor as Fed chair but even on reports that Powell is in the lead, 10s have held above that key level. And it looks like they will score a weekly close above too.
That said, you would like to see a bit of breathing room before declaring it broken. With the Fed decision, the Fed chair decision and non-farm payrolls in the week ahead, I don’t think it will be a long wait.