A Turning Point for Treasury Yields?
For the first time in 33 years, the long end of the US yield curve is threatening the relentless downtrend. Over the last two months we have closed above the 100 month moving average (simple moving average at the end of September and the exponential moving average at the end of October). In May of 1985 we closed below it and it has never closed above it again on a monthly basis ... until now.
On October 9th we highlighted that the US 10 year Treasury total return chart was rolling over. We see this yield break as a confirmation.
Is this a guarantee for higher rates in the near-term? No, but it is a potential hint that the trend is turning… The key for price action will be the interplay between potentially higher rates and equities. This is a dynamic that has not been seen by many current market participants and we think underlines our concerns about increased financial market volatility going forward.