Treasury Yield at Lowest Since When?The 10-year Treasury yield is one of the most important non-stock indicators because it reflects expectations about the direct of interest rates. That, in turn, can impact growth stocks and the Nasdaq-100.
Today’s chart shows the rapid evolution of the rate environment since the banking crisis emerged in the middle of last month.
First consider the December low of 3.40%. TNX bounced there in February and tried to hold it in March. But yesterday it plowed through that level, ending the session at the low. (It was the lowest close since early September.)
Second, you have the series of lower highs starting on March 14. Combined with the horizontal line at 3.40%, the result could be a descending triangle.
Next, roll back the clock about two months. TNX ripped through a falling trendline after holding 3.40%. It tried to establish a new high above December’s peak but failed. That price action could now look like a failed breakout, with the more recent patterns pointing lower.
This downward movement in yields corresponds to a falling U.S. Dollar and weakening economic data. (Last week’s jobless claims were higher than expected. March manufacturing data missed on Monday, February job openings missed yesterday and ADP’s March private-sector payrolls missed today.)
These points may help confirm a new regime of lower rates and less-hawkish policy from the Federal Reserve.
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