US 10-year Treasury yield ascended to an impressive 4.354%, marking its loftiest level since November 2007, before stabilizing at 4.342%. Notably, 10-year inflation-protected Treasury yield surpassed 2% threshold, the first such occurrence since 2009. This move highlights a significant journey from its year-to-date nadir, which hovered around 1%.
Adding to the mix, the ever-relevant two-year yield grazed 5% mark during the later hours of US session. This ascent falls just short of the highs registered earlier this year in both the previous month and March.
This rise can be attributed to indications of a more robust than anticipated growth across segments of the global economy. Such growth metrics are spurring speculations on central banks’ potential inclination to maintain interest rates on current high levels for an extended duration than previously assumed.
As 10-year yield broke through 4.333 resistance, there are two questions now. Firstly, it’s whether TNX could sustain above this resistance level. Secondly, it’s whether there will be upside acceleration after clearing this resistance decisively. In any case, outlook will stay bullish as long as 4.094 resistance turned support holds. Next medium term target is 61.8% projection of 1.343 to 4.333 from 3.253 at 5.100.