Sunday, November 22, 2015

UST2Y 2-Year Treasury Note Yield Daily Chart

The 2-year yield has exploded higher (lower note prices higher yields) from 0.57% to 0.93% during the last month; a huge 36 basis points! After ECB President Draghi announced plans to fire a bigger QE money bazooka on 12/3/15 one month ago, the euro has dropped, which is Draghi's main goal, US dollar has popped, and the 2-year yield has ran higher. The Fed rate hike planned for 12/16/15 is pricing in.

The red lines show neggie d except for the MACD line so yield should roll back over to the downside beginning in the first half of this week. The weekly chart remains long and strong so the pull back in yield will then result in yields moving higher again in December. Keystone's 80/20 rule says 8's typically lead to 2's so the breach above 0.80 places the 1.20-ish area in play. The ADX sneaks above 25-ish so the trend higher in yields (lower note prices) is a strong trend so the 2-year yield would be expected to continue higher going forward. The following three dates will be key pivot areas for note and bond yields. The ECB QE announcement is on 12/3/15. The US Monthly Jobs Report is on 12/4/15. The Federal Reserve is expected to hike rates on 12/16/15. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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