December 1, 2022

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US 10 year yield trades in the highest level since July 16

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High yield moves to 1.320%

The US 10 year yield is trading up to the highest level since July 16 today. 

High yield moves to 1.320%_

In the process, the yield moved moved above the July 22 high yield at 1.3150. Looking at the hourly chart the next key target comes in at the 1.3479% level. That level represents the 38.2% retracement of the move down from the May 13 high.

The 10 year yield is up sharply from last week’s August 4 low near 1.127%. That low yield stalled right near the low from July 20 at the same level. 

The yield moved above the 100 and 200 hour moving averages on Wednesday and Thursday (blue and green lines – more positive), before running higher again on Friday after the better than expected jobs report in the US (the US added over 1 million jobs).  

There is additional room to roam in the upward direction if the US economy continues to expand with higher inflation. This week the US will release both CPI and PPI data. The CPI will be released on Wednesday month-to-month estimate at 0.5% and the core expected to rise at 0.4% (vs 0.9% for both last month). The PPI data will be released on Thursday with expectations of 0.6% and core at 0.5% (vs 1.0% and 1.0% last month). 

Higher yields are helping to push the US dollar higher. They are also contributing to the shortfall in gold prices. The prices down $33.98 at $1728.60.

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