Treasury Selloff Overreaction?
The recent four-day Treasury selloff, driving 10-year yields up by approximately 10bps, is being viewed as excessive by market analysts. The move was likely triggered by higher-than-expected PPI data impacting the 10- and 30-year auction longs, leading to selling pressure from Commodity Trading Advisors and fast money across the bond curve.
Despite concerns about consumer spending durability highlighted by weaker-than-expected retail sales, Treasury yields are expected to stabilize around 4.19% to 4.25%. The 10-year notes currently yield about 4.29%, with potential support at the year-to-date high of 4.349% and resistance at this month's low of 4.034%.
Technical analysis suggests that the 100-day moving average of 4.244% could serve as a significant level, as yields have not closed higher than this average since May. $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Dow Jones Industrial Average(.DJI.US$ $Invesco QQQ Trust(QQQ.US$ $SPDR S&P 500 ETF(SPY.US$
Despite concerns about consumer spending durability highlighted by weaker-than-expected retail sales, Treasury yields are expected to stabilize around 4.19% to 4.25%. The 10-year notes currently yield about 4.29%, with potential support at the year-to-date high of 4.349% and resistance at this month's low of 4.034%.
Technical analysis suggests that the 100-day moving average of 4.244% could serve as a significant level, as yields have not closed higher than this average since May. $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Dow Jones Industrial Average(.DJI.US$ $Invesco QQQ Trust(QQQ.US$ $SPDR S&P 500 ETF(SPY.US$
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