The TNX should be watched very closely next week as the daily chart currently indicates a high risk of seeing another bond rally in the wake of the latest US employment figures (which weren't all that bad). If doubts over a possible Fed rate hike towards the end of the year strengthen in September, the 10-year yield could fall back to it's historical lows, reached earlier this summer. This trade setup currently suggests that so long as the TNX trades sub 1.65%, bond prices are likely to rebound in September. The other scenario would consist in prices breaking support, perhaps in the wake of hawkish comments by FOMC participants, leading to a new period of rising rates similar to that which we saw in 2013 and 2015.
Commentaire:
Judging by yesterday's close (at 1.61), this market may attempt to break the resistance cited above sometime by early next week. Waiting to see what happens today (Friday, Sept. 9).