Can the yield stay above 2.40%
The US 10 year yield rose about 6 bp yesterday and in the process moved above the 2.40%. Back in May the yield moved above the 2.40% to 2.41% but could not sustain the level and the yield moved back lower (to around 2.13%).
In July the price moved back up to the 2.40% area again, peaking at 2.385%, but again stalled and the yield fell back down. This time the low in September fell to around 2.04%.
Since that time, the yield has once again moved higher and moved above the 2.40% level once again yesterday. The high yield moved to 2.4262%.
Part of the rise was attributed to Pres Trump conducting a straw poll of Senate Republicans as to who they preferred as the next Fed chair. John Taylor - a hawk - was apparently the winner. Who Trump ends up picking is not certain. He tends to like low rates and if a hawk comes in and upsets his stock market apple cart in the process, the boss would not be pleased.
Nevertheless, if there is a pattern with the President, it is if there is a someone or something that has President Obama attached to it, it has a good chance of being changed. The President is up to being "very, very, very close" to making a decision.
Technically, looking at the yield chart above, the yield is above both the 200 day MA at 2.3116% and the 100 day MA at 2.2447%. The high for the yield reached 2.63%. Other targets come in at 2.51% and 2.59%. A move above the 2.63% would open the door for a potential run toward the 3.0% level over time....
PS the USDJPY and US dollar tends to like higher yields as do bank stocks. JP Morgan closed above $100 for the first time ever yesterday and Citigroup was up 1% to $74.24. It reached a high at $76.14 earlier in the month before retreating after earnings. It is back on the upswing.
