Treasury Yields: The Downtrend Steepens
The 10-year Treasury yield has been a key chart for risk appetite since interest rates started rising in late 2021. Now it might be confirming a move in the opposite direction.
The first pattern on today’s chart of TNX (using 2-day candles) is the series of lower highs since October. Notice the steepening downward slopes of the falling trendlines. Does this reflect a growing belief that interest rates are headed lower?
Second, the yield broke June’s low 4.188. It’s also under the key 4.32 level dating back to June 2008. That may suggest the 2-3 year uptrend is fading.
Traders may next eye the December low around 3.80 as a key level to watch.
The move comes after the Federal Reserve suggested a rate cut is more likely next month. News and data could also support the change. For example, initial jobless claims were above forecasts and continuing claims reached their highest total in almost three years. Unit labor costs were below estimates and productivity surprised to the upside. Data from the Institute for Supply Management also indicated a potentially sharp slowdown in manufacturing last month.
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Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
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TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
The first pattern on today’s chart of TNX (using 2-day candles) is the series of lower highs since October. Notice the steepening downward slopes of the falling trendlines. Does this reflect a growing belief that interest rates are headed lower?
Second, the yield broke June’s low 4.188. It’s also under the key 4.32 level dating back to June 2008. That may suggest the 2-3 year uptrend is fading.
Traders may next eye the December low around 3.80 as a key level to watch.
The move comes after the Federal Reserve suggested a rate cut is more likely next month. News and data could also support the change. For example, initial jobless claims were above forecasts and continuing claims reached their highest total in almost three years. Unit labor costs were below estimates and productivity surprised to the upside. Data from the Institute for Supply Management also indicated a potentially sharp slowdown in manufacturing last month.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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