Benchmark Treasury yield pushes higher ahead of Fed minutes
U.S. equity index futures ~flat to slightly negative
Mortgage Market index 201.9 vs 198.1 prior
Euro STOXX 600 index off ~0.4%
Dollar edges up; gold, bitcoin dip; crude futures off ~1%
U.S. 10-Year Treasury yield rises to ~4.45%
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BENCHMARK TREASURY YIELD PUSHES HIGHER AHEAD OF FED MINUTES
Fed Governor Christopher Waller said on Tuesday that he would need to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy.
That timeline was echoed by Cleveland Fed President Loretta Mester.
Additionally, markets are also digesting UK inflation data, which did not slow as much as expected.
With this, and ahead of the release of the minutes of the Fed's April 30-May 1 monetary policy meeting expected at 2 pm ET Wednesday, which investors will scrutinize for further clarity on the central bank's thinking, the U.S. 10-Year Treasury yield US10YT=RR is pushing up to the 4.45% area as choppy rangy action persists:
This puts the yield essentially right on the rising 50-day moving average (DMA), which now resides at about 4.45%.
Still, the yield would need to push above resistance at the May 14 high at 4.534%, as well as the 61.8% Fibonacci retracement of the October-December slide at 4.5481%, to refocus on the maximum Fibonacci retracement barrier of the October-December decline in the 4.7288%-4.7561% area.
This zone capped strength in late April as the yield stalled out at 4.739%. The yield would need to end above 4.7561% to suggest a continued advance that would then likely exceed the 5.021% October 2023 peak.
The rising 200-DMA, which held on a closing basis amid last week's weakness, is now around 4.33%.
Additional support is at last week's 4.313% trough as well as the rising 100-DMA, which now resides around 4.28%.
In the event the yield were to post a weekly close below the weekly Ichimoku Cloud, the lower boundary of which now resides around 4.14%, it would suggest a significant trend change.
Since closing above the Cloud on a weekly basis in early February 2021, the yield has not ended a week back below it.
(Terence Gabriel)
*****
FOR WEDNESDAY'S EARLIER LIVE MARKER POSTS:
SERVICES TO BLAME AS UK INFLATION STAYS HOT - CLICK HERE
UTILITIES: WHAT A DIFFERENCE A MONTH MAKES! - CLICK HERE
BANKS: WHEN RATE CUTS COME, SO WILL PROFIT-TAKING - CLICK HERE
WHY US YIELDS CAN GO BACK TO RECENT HIGHS... OR BEYOND - CLICK HERE
STOXX STUMBLES AS AUTOS DRAG - CLICK HERE
STOXX FUTURES FLAT AS FTSE LAGS POST-CPI - CLICK HERE
NVIDIA VIGIL ALMOST OVER - CLICK HERE
US10YT05222024 https://tmsnrt.rs/4auhmwb
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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