US 10yr Yields: Multi-decade downtrend over, dips in yield allow for repositioning for higher yields in 2017 – Westpac

Tim Riddell, Research Analyst at Westpac, indicates that the daily momentum is now supportive for US 10yr Yields, opening potential for sound retracements towards the 2.40-2.46% and potentially a retest of the 2.60-65% area.

Key Quotes

“Patterns off the 2.60-65% area appear wholly corrective and though a broader consolidation may develop, the underlying trend is for rising yields.”

“Weekly

• Weekly momentum has potential to turn positive after the recent slide. Yield moves since mid-December’s high are decidedly corrective
• Despite breaching the spike below 2.20%, yields now look set to retest the upper half of their recent range within potential for moves extending to 3.00-3.15%”

“Monthly

• Little has changed in the broad scenario for higher yields, despite a pause in rise of monthly momentum.
• The style of the squeeze from 1.38% suggests that a multi-year trend change has occurred. Logged yields are still hugging the previous down-trend”