Rising yields pressure the US30

  • US30

US 10-Yr Treasury - Weekly

Source: www.tradingview.com

The US 10-Yr Treasury retreated over three weeks as its RSI normalised from an overbought condition (green shaded horizontal). However, it has found support near the 2.7% level and looks to have charted the next higher trough in its uptrend. The 10-yr yield's stochastic remains in its upper quintile (orange shaded area), suggesting that the underlying momentum remains strong. Will it chart a new higher peak remains a question?

US30 and Yield - Hourly

Source: www.tradingview.com

Yields kicked up yesterday from about noon GMT. This appreciation has placed pressure on the US30, which has pulled back. This causality is not surprising, given the current correlation between the two. The indicator at the bottom is the correlation coefficient between the US10-Year Treasury and FXCM's US30 CFD on an hourly basis. Since the beginning of June, there has been an apparent inverse relationship (green shaded horizontal), with the current reading at a decisive -0.81%.

The robust non-farm employment change on Friday supports continued contractionary policy. Market participants now focus on Friday's inflation data for further information. Moreover, the normalisation of the Fed's balance sheet is likely to keep yields supported as the money supply declines.

Trade the News: View our Economic Calendar

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.