LIVE MARKETS-Benchmark Treasury yield turning heavy again

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BENCHMARK TREASURY YIELD TURNING HEAVY AGAIN

Longer-dated U.S. Treasury yields ended roughly flat on Tuesday with investors focused squarely on tariff negotiations between Washington and its trading partners, with President Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions between the world's top two economies simmer.

On Wednesday, May ADP national employment came in at just 37k, which was well shy of the 110k estimate. Last month's read was revised down to 60k from 62k.

This, ahead monthly jobs data due on Friday which will likely offer more clues into how trade uncertainty is affecting the U.S. economy, and a U.S. central bank meeting June 17-18.

The U.S. 10-year Treasury yield US10YT=RR, which ended at 4.46% on Tuesday, is now around 4.40%.

May ISM non-manufacturing PMI is due at 10:00 a.m. ET. The estimate calls for 52.0 vs 51.6 last month.

On the charts, over the past several years, the yield has been trapped in a contracting range:

Shorter-term, however, the yield has been under pressure and is once again nearing its rising 55-day moving average which is now around 4.34%. A close below this Fibonacci-based moving average, can refocus the yield the March-May lows in the 4.124%-4.10% area.

The April trough was at 3.86% and the support line from the April 2023 trough is now around 3.78%.

On the upside, resistance is at the February-May highs in the 4.592%-4.66% area. The resistance line from the October 2023 high is now 4.75%.

Meanwhile, the 14-day Relative Strength Index (RSI) is weakening. This, after failing to muster enough strength to reclaim the 70.00 overbought threshold in mid-May.

Perhaps underscoring the indecisiveness of the market, this RSI has not been able to move into overbought territory since mid-January of this year. It was last officially oversold (sub-30.00) in early August 2024.

(Terence Gabriel)

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