📊US10Y: probable fall

📊The yield on 10-year US bonds has increased by 105% since February of this year. During this time, market participants have paid special attention to the level of 2.74%, that currently acts as the main support. The current trend towards the strengthening of the US dollar would continue to put pressure on the yield on US 10-year bonds and on the economy as a whole. The spread between 2-year and 10-year bonds adds more fuel to the fire. The yield on 2-year bonds is higher than on 10-year bonds:


This graph shows clear signs of a recession, which is no longer in doubt. All signs of the deepest crisis on the face.

☝️It is necessary to remember:

🔴 In a favorable economic situation, the yield curve has a convex shape, namely, short rates are lower than long ones, that reflects the positive economic expectations of the market❗️

🔴 Inversion - when short is higher than long - this is a signal of an impending recession, but this type usually does not last long❗️

🔴 A flat curve indicates that the market sees hopeless stagnation, which is what we are actually seeing now❗️

Technical analysis speaks more in favor of sales than longs: the right shoulder of the "head and shoulders" reversal pattern is being formed, the base of this model is just the same at the level of 2.74% mentioned earlier. The final moment in this "sell history" is the breaking of the Moving Average down, which indicates the beginning of at least a downward correction. Prospects for downward movement are at the level of 2.39%.

In any case, an alternative scenario assumes a pause in growth, but a downward correction is more likely, that may be less than the declared movement according to the main scenario.

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