US treasury yields surged sharply overnight as investors continued to adjust themselves “living with the virus”. Omicron is now generally taken as being much less harmful to the global economy as initially feared, despite record infection numbers.
10-year yield closed up 0.116 to 1.628, back above 1.6 handle for the first time since November. We’re holding on to the view that consolidation pattern from 1.765 has complete with three waves at 1.343. TNX could accelerate upwards in the near term to 1.693 resistance. Firm break there would send TNX through 1.765 to resume larger up trend from 0.398 (2020 low).
The picture in 30-year yield is similar. It’s now back above 2.0 handle after yesterday’s rise. Corrective pattern from 2.505 should have completed with three waves down to 1.678. Further rally should be seen to 2.177 in the near term. Sustained break there will raise the chance that it’s already resuming the up trend from 0.837 (2020 low) through 2.505 high.