Fed governor Waller hinted at a potential policy pivot yesterday and that was enough for traders to run with it, after having long hoped to hear those words come out from the mouths of policymakers. In turn, the bond market saw a notable development with 10-year Treasury yields falling past the 100-day moving average (red line) and the drop is continuing today:

US Treasury 10-year yields (%) daily chart

That is a massive technical level that is being breached and sets the tone for lower yields, with a potential look towards 4% next. That is still some ways to go after the near 70 bps drop in the last one month and there is an argument that perhaps with four rate cuts priced in for next year, we have perhaps run up against the curb in angling for the Fed's policy pivot.

Nonetheless, the technical sign above is not a good one if you're a bond sellers as buyers are showing up to prove that the drop from 5% yields is not a fluke retracement of sorts. It's one predicated on a potential loosening in policy by the Fed and Waller reaffirmed that yesterday.

As yields look to drop further from here, that hints at more pain for the dollar to come heading into year-end. That is if the technical break above is anything to go by.