US Treasury 10-year yields (%) daily chart
If you go by the technicals, there is still more pain for bond bears after the strong rally in bonds in November. December itself is already following a similar pursuit, with 10-year Treasury yields down by 15 bps on the month so far and that is accounting for the slight bounce in the last two days.
The key spot to watch in the technical space now is the 200-day moving average (blue line) and the 4% mark – that is if there is more downside to come for yields.
But considering how traders have already aggressively priced in Fed rate cuts for next year, it might be tough to expect a similar kind of rally in bonds as we saw last month.
However, if there is more shaky US data to come, perhaps there is still scope for the squeeze to run further. And that could come as soon as the US jobs report later today. Keep a close eye on yields in the aftermath as that will have broader market reverberations as well. even if the dollar has shrugged this off as of late.