Today’s cooler readings on inflation and jobless claims were welcome news for stock-market bulls. They could be even more important for the Treasury market.
Today we’re considering the yields of the of two-year (US02Y) and 10-year (TNX) notes.
The two-year shot to a 16-year high above 4.8 percent on November 4 after non-farm payrolls but failed to hold: a shooting star. It’s also noteworthy that the data had a touch of “Goldilocks,” with total jobs and unemployment both higher than forecast. Those headlines, and subsequent lows, potentially confirm the shooting star as a reversal pattern.
There’s also a rising trendline along the lows of August and September that was broken on Thursday. Both events may suggest two-year Treasury yields have peaked.
Next is the weekly chart of 10-year Treasury yields. They touched 4.33 percent in mid-October, the highest level since June 2008. Two inside weekly candles followed, potentially indicating a halt to the uptrend.
These patterns together, combined with the Euro solidly back above parity, could mark a change from the kind of price action that’s characterized most of 2022. It could have a positive impact on broader sentiment if it continues.
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