US treasury yields staged a strong rebound overnight following the much stronger than expected CPI data. Five year yield closed up 0.146 at 1.214. The development suggests that pull back from 1.251 has completed after well defending 1.042 support. The stay above rising 55 day EMA also keeps near term outlook bullish. Retest of 1.251 resistance would be seen soon. Firm break there will resume larger up trend from 0.192 to 100% projection of 0.192 to 0.988 from 0.606 at 1.402.
10-year yield also closed up 0.128 at 1.560. While the treat from 1.691 should have completed at 1.415, there is no clear sign of an upside breakout yet. Also, even if 1.691 would be broken, there is another key resistance at 1.765 ahead. Hence, near term outlook is more on the neutral side for now.