LIVE MARKETS-Benchmark Treasury yield hits multi-month highs

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BENCHMARK TREASURY YIELD HITS MULTI-MONTH HIGHS

The U.S. 10-year Treasury yield hit fresh multi-month highs on Thursday, a day after soft demand for a sale of 20-year bonds underscored market worries about the United States' increasing debt burden.

Investors also have an eye on Washington as President Trump's sweeping tax-cut bill passed the U.S. House this morning.

The U.S. 10-year Treasury yield US10YT=RR, which ended at 4.597% on Wednesday, rose as high as 4.629% on Thursday, its highest since mid-February. After slightly fewer initial jobless claims than expected, the yield, which is on pace to rise for a fourth-straight week, is now around 4.59%.

May S&P Global manufacturing and services PMIs are due at 09:45 a.m. ET, while April existing home sales are coming at 10:00 a.m. ET.

On the charts, traders are watching resistance at the 4.66% mid-February high as well as significant hurdles in the 4.739%-4.809% area:

This zone includes the April 2024 high, the resistance line from the October 2023 high, which is now around 4.76%, and the January 2025 high.

With the 14-day Relative Strength Index (RSI) now around 65.00, the yield appears to be at a critical juncture. It now remains to be seen if the RSI can muster enough strength to reclaim the 70.00 overbought threshold.

If it can, and the yield vaults above the 4.76%-4.809% area, the advance will likely extend above the 5.021% October 2023 peak. The upper yearly Bollinger Band is now around 5.10%.

The RSI stalling shy of 70.00 will likely see the yield roll under the resistance line, and suffer a setback.

A reversal below the May 16 low at 4.388%, and the rising 55-day moving average which is now around 4.32%, can refocus the yield on the lower boundary of the contracting multi-year range defined by the resistance line and a support line from the April 2023 trough.

(Terence Gabriel)

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