US10Y Yield Poised to Explode

27 abr 2021

After a strong 7Y YST auction, the US10Y yield just broke out above the 21 day EMA. We're back at 1.615%, and poised to blow up as the week progresses. This recent buying frenzy in bonds may be exhausted, and yields could be poised for a solid spike higher (potentially on Powell remarks about future monetary policy tightening tomorrow). Fed QE bond purchases are still running at $120 Billion per month, so any hint of tapering could send markets into a tailspin. Especially as the Treasury will increase bond supply simultaneously. Don't even mention an increase in the IOER, or banks will close credit lines faster than you can blink...