The yield curve after the yuan re-valuation

The battle between the Federal Reserve pushing the short term rate from below and the bond market keeping a lid on long term rates continues. I have drawn a downtrend line joining the highs of the 10-year note yield and another downtrend line joining the highs of the 30-year bond yield. The bond market may signal a defeat if these lines are violated. Note how these lines are converging. The uptrend lines defined by the lows of 30-year, 15-year and 5-year notes, on the other hand, are almost parallel.



Categories: bond market, interest rates