10-year yields hold steady at 1.58% after the drop yesterday
Things may be more quiet in European trading once again as Treasuries look to stabilise after the rally yesterday, which sent yields to its lowest levels in over a month.
10-year yields broke below the soft bottom around 1.60% and is seen holding around 1.58% after having hit a low of 1.53% in US trading overnight.
The technical break suggests that the narrative in the market has shifted to awaiting more consistent and robust US economic data in the months ahead before bond traders will feel comfortable again in chasing the steeper for longer theme.
For now, we may well be contained in a fresh cycle range for Treasury yields until there is reason for the macro picture to change - be it vaccine optimism growing/fading or US economic data continuing to run hot/fails to deliver.
Looking towards European trading today, the steadier sentiment in Treasuries is pinning US futures lower while the dollar is mildly higher across the board.
