The jump in Treasury yields yesterday is keeping things rather interesting to start the new week/month. Sure, the US ISM manufacturing data was better than expected. But did that warrant a roughly 10 bps jump in 10-year yields? It's tough to completely attribute the selling in bonds just to that. So for now, the best we can do is to weigh up the technical side of the equation.

US Treasury 10-year yields (%) daily chart

As seen from the chart above, 10-year yields are bouncing after having stuck around the confluence of the 100 and 200-day moving averages. Adding to that is a trendline support (white line) for yields closer to 4.18%. And I would argue that the balance of those technical elements is also playing a part in the bounce in yields yesterday.

Right now, there is also a key ceiling at around 4.35% that is limiting a further run higher in yields. That will be one to watch in the sessions ahead, as we gear towards the US jobs report on Friday.

If yields are to break higher above the key level, expect that to reverberate to broader markets i.e. dollar and risk trades as well.