By now even my kids know yields are going lower.
We live in truly amazing times, what is happening in yields currently is something we have not seen in the developed world.
US 10-year yield has been trading inside a very strong negative trend this entire year, but lately yields have refused taking new fresh lows.
Calling the lows in yields is stupid and impossible, but it could be the US 10 year is making a small new trend channel higher. The big resistance is around the 2.2% level, worth observing.
Should we take out those levels, things could get very interesting!
Europe continues to be a mess and yields have continued collapsing. German 10-year yield traded below the ECB deposit level briefly post the ECB show yesterday. Negative yields seem to be the only tool left, but this will have longer term consequences. Banks earnings will be punished etc.
We saw a sharp uptick in German yields post the ECB yesterday.
For now, the trend remains very much down, but watch this space carefully. Any bigger move to the upside risks spilling over to other assets.
Yields going lower is the biggest consensus trade globally, and whenever the masses have all piled into one huge trade, the prudent investor should dance close to the exit.
Source, charts by Tradingview
