LIVE MARKETS-Benchmark Treasury yield waiting for the gavel to fall

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BENCHMARK TREASURY YIELD WAITING FOR THE GAVEL TO FALL

U.S. Treasury yields rose on Tuesday as President Donald Trump announced more tariffs and before the Treasury will auction 10-year and 30-year debt in the coming days.

Investors remain jittery that higher tariffs will increase inflation and slow economic growth, though so far price pressures have remained relatively contained.

Meanwhile, the Treasury saw soft demand for a $58 billion auction of three-year notes on Tuesday. The Treasury will sell $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday.

Longer-dated yields have risen more than shorter-dated ones this week, which may help boost interest in these upcoming auctions.

In any event, since peaking in May at 4.629%, the yield had been heavy. However, since bottoming at the lower boundary of the weekly Ichimoku Cloud on July 1 at 4.187%, the yield has caught a bid:

The yield ended Tuesday up about 2 basis points at 4.417%, which was it fifth-straight daily increase. The yield last rose five days in a row in May. The yield last increased more than five straight days during a seven-day stretch in October 2024.

On Wednesday so far, the yield is little changed.

Traders are watching to see if in the wake of the auctions, the yield rolls under resistance at about 4.45%.

On the downside, the upper boundary of the weekly Cloud is now initial support at around 4.32%.

A yield dive below the lower boundary of the weekly Cloud, which is now around 4.20%, as well as the early-July low at 4.187%, confirmed by the weekly close, would suggest a developing breakdown that can threaten the early April low at 3.86%, and the support line from the April 2023 trough which is now around 3.80%.

A daily close above 4.45%, however, can suggest the yield is going to make another play for its February-May highs in the 4.592%-4.66% area.

The resistance line from the October 2023 peak, seen as a key hurdle, now resides around 4.74%.

(Terence Gabriel)

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