LIVE MARKETS-Benchmark Treasury yield on a 6-week losing streak

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BENCHMARK TREASURY YIELD ON A 6-WEEK LOSING STREAK

Longer-dated U.S. Treasury yields fell on Monday, extending declines after the latest reading on the manufacturing sector, and President Donald Trump imposing tariffs on trade partners that could intensify a growth-denting global trade war.

The U.S. 10-Year Treasury yield US10YT=RR ended Monday at 4.18%. On Tuesday, the yield fell to 4.115%, or its lowest level since October 21st of last year. It's now around 4.13%.

The yield is on track to fall for the ninth time in 10 trading days and a sixth week in a row. The yield last fell more than five straight weeks with a seven-week losing streak that ended in July 2016.

Meanwhile, the yield is nearing support at the lower weekly Bollinger Band, which is now around 4.08%, and the lower boundary of the weekly Ichimoku Cloud, which now resides around 4.05%:

Thus, the yield appears to be at a critical juncture, especially with the February jobs report due on Friday. Given that the weekly Bollinger Band width is at its tightest since mid-July of last year, breaking the 4.08%-4.05% area will have the potential to trigger a sharp increase in downside momentum. The December 2023 trough was at 3.783%.

However, ending a week below the weekly Cloud, can put the September 2024 low, at 3.599%, and the April 2023 trough at 3.253% back on the table.

Initial resistance is in the 4.23%-4.26% area which includes the 200-day moving average and the Fibonacci-based 89-week moving average.

The yield will need to score a weekly close back above the upper weekly Cloud boundary, which now resides around 4.33%, and thrust above the early February trough, at 4.40%, to suggest it's making another attempt to ultimately attack its 5.021% October 2023 high and above.

(Terence Gabriel)

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