Stephen Innes
SPI Asset Management
After peaking at 4.89% last week, the 10-year US Treasury yield retraced to an intraday low of 4.62% yesterday, pushing against the one-way ticket to 5 % that many had stamped.
The initial trigger for this reversal was the escalation of geopolitical tensions in the Middle East involving Hamas and Israel, which increased demand for safe-haven assets.
However, investor risk sentiment improved as confidence grew that the conflict would likely remain contained and not disrupt financial markets significantly.
Notably, the recovery in risk sentiment hasn't translated into higher US yields, indicating a degree of acceptance of the Federal Reserve's less hawkish turn.
While the market awaits the release of US PPI data and the Fed's meeting minutes today, recent dovish comments from Fed officials have been suspiciously synchronized; hence, US bond yields have continued to slide, suggesting recent Fed rhetoric is sinking in and will take precedence, over the meeting minutes.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
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