The key thing to note about the bond market last week was that we saw 10-year Treasury yields bounce off its 100-day moving average just below 4.40%. It is now holding around 4.465% on the day, down 2 bps as business-as-usual flows start to return after the Thanksgiving holiday period.
US Treasury 10-year yields (%) daily chart
The 100-day moving average marks a crucial test for traders, especially for those trying to justify an extended rally in the bond market since the end of October. 10-year yields have fallen all the way down from 5% to where we are now, but is there more to it?
The technicals will go some way in trying to settle the debate and the first real test is the one highlighted above. If bond buyers have any real appetite of keeping the recent rally going, they have to push past that level first and foremost.
Keep a watchful eye on things here as it will have spillover impact to the dollar and stocks as well.