US 10-year yield surged to as high as 2.868 overnight, highest since late 2018, before closing at 2.862. The up trend continued in anticipation of more rate hike from Fed, as well as the start of balance sheet runoff ahead. The development in yields provided additional selling pressure on Yen, with BoJ’s cap on 10-year JGB yield at 0.25%.
Technically, further rise is expected in TNX as long as 2.646 support holds. Next target is 3% handle. Meanwhile, it should be reiterated that TNX could be considered successfully taking out multi-decade falling channel resistance decisively. Next key hurdle is 3.248 resistance (2018 high). If TNX could surge pass this resistance with power, it would really mark the start of a “new era”.
