LIVE MARKETS-Benchmark Treasury yield flirting with the clouds

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BENCHMARK TREASURY YIELD FLIRTING WITH THE CLOUDS

U.S. Treasury yields declined to multi-week lows on Wednesday, weighed down by a weak report on the services sector, with investors continuing to grapple with persistent uncertainty about President Trump's tariff policy and the prospect of trade wars.

The U.S. 10-Year Treasury yield US10YT=RR tumbled to a low of 4.40% on Wednesday, or its lowest level since Dec. 18, before ending at 4.42%. The yield is edging up to around 4.43% on Thursday.

Investors await January payroll data due on Friday. Expectations call for job creation of 170k vs 256k last month.

In any event, with Wednesday's slide, the yield ended below its 55-day moving average (DMA), which now offers resistance around 4.48%. Of note, the 55-DMA had supported the market in early December when the yield hit 4.126%.

Attention now turns to Ichimoku Clouds for additional support levels.

Ichimoku Cloud is a technical indicator which displays support and resistance, identifies trends, and measures momentum. Utilizing midpoints of ranges, a number of lines are generated. Two of these lines are used to create Cloud boundaries. The entire cloud is shifted forward in time in order to provide a glimpse of future support and resistance.

The upper and lower boundaries of the daily Cloud now reside around 4.45% and 4.32%.

The upper and lower boundaries of the weekly Cloud now reside around 4.34% and 4.14%:

The yield may attempt to resume its advance as it dips back toward, or into these Clouds.

A daily close below the lower daily Cloud boundary can see pressure intensify. A weekly close below the lower weekly Cloud boundary, which also takes out the 4.126% early-December trough, can suggest the potential for a much deeper retreat.

An immediate recovery above Tuesday's 4.599% high, as well as the descending 21-DMA, which is now around 4.60%, can suggest the yield is back on track to the upside.

The January high was at 4.809%. The October 2023 high was at 5.021%.

(Terence Gabriel)

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