TRADING 04 FUTURES

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TREASURY YIELDS SURGE, BUT FALL SHORT OF A BREAKOUT... With the big risk-on move today, treasury bonds are falling as money moves out of this safe haven. Treasury bonds and yields move in opposite directions, which means yields are moving higher. Chart 10 shows the 10-year Treasury Yield ($TNX) surging above 16 (1.6%) and hitting some resistance at 17 (1.7%).
This is a key level to watch going forward. If this stock market advance is to continue, the 10-year Treasury Yield needs to break above 17. This would signal a continuation of the early June surge and open the door to further gains, which means treasury bonds would fall. Money moving out of treasury bonds would then become available for stocks.
Failure to break above 17 could question the sustainability of today’s stock market surge. Note that treasury market will be watching next Friday’s employment report quite closely.
by ART HILL
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Chart below will update.