TNOTE continues sell-off as markets await Fed signals and reassess rate cut expectations📌

The U.S. Treasury market remains a focal point for investors as yields continue to rise, with the 10-year benchmark climbing above 4.11% on Monday. This upward movement comes as market participants eagerly await insights from a series of Federal Reserve policymaker speeches scheduled throughout the day. The yield curve, a key indicator of economic expectations, has shown some steepening, with the spread between 2-year and 10-year yields widening slightly. This development suggests that investors are recalibrating their expectations for future economic growth and inflation. Meanwhile, market-implied rate cuts for the coming year have been gradually adjusting, reflecting a more cautious outlook on the pace of potential monetary policy easing.

US Treasury Yield Curve Source: Bloomberg

Despite concerns over the rising national debt and potential political uncertainties surrounding the upcoming U.S. presidential election, U.S. Treasuries continue to maintain their status as attractive safe-haven securities. The 10-year note, in particular, remains a cornerstone of global financial markets, serving as a benchmark for various lending rates and a key component in portfolio allocation strategies for investors worldwide. Its yield movements are closely watched as they reflect broader economic sentiment and expectations for future inflation and growth. The resilience of U.S. Treasuries is underpinned by several key factors, including the United States' hegemonic position in the global financial architecture, its persistent leadership in innovation, and the lack of credible alternatives in the international market. Currently market prices in approximately two interest rates cuts, 25 basis points each.

Implied Interest Rates in the US Source: Bloomberg

Additional key points:

• Current 10-year Treasury yield: approximately 4.128%, up about 5 basis points
• Yield curve steepening: Spread between 2-year and 10-year yields has widened slightly
• Market-implied rate cuts for the coming year are being reassessed based on recent economic data and Fed comments
• The 10-year note auction results and trading patterns are closely monitored for insights into investor demand and market sentiment
• Geopolitical factors and global economic conditions continue to influence Treasury yields and investor behavior in the bond market

TNOTE continues sell-of slowly approaching 61.8% Fibonacci retracement level. RSI remain near the oversold zone, with MACD tightening. Source: xStation