The turning point in the bond market in October last year arguably came after the Treasury quarterly refunding announcement. And are we seeing a similar moment for Treasuries again after the estimate announced here yesterday? 10-year yields were up at around 4.16% at the end of last week but have now fallen by some 12 bps this week.
US Treasury 10-year yields (%) daily chart
Perhaps more importantly, we are seeing yields fall under its 200-day moving average (green line) at 4.089%.
That is a key technical level that is being breached this week, after the highs this month stalled at around 4.19%. In other words, bond buyers are seizing back control and a break under 4% will solidify that even further.
That being said, bond sellers are not entirely out of it just yet. There are still two key hurdles to work through in markets this week. The first being the Fed meeting tomorrow and the second being the US jobs report on Friday.
Those are major risk events for markets in general but is really a double-edged sword at this point. Depending on what we see or hear from Powell and also the labour market data, it could help to prop yields back up again. Or it could compound the misery for bond sellers, as well as the dollar, in trading this week.