The 10 Year bond yield should reverse higher

In the chart below, you can see that last night the U.S. Government 10 Year Bond Yield (‘the 10’s’) touched the lower end of a daily 2.5 standard deviation point and kissed the supporting trend line.

They are a ‘hair’ away from being Oversold. It’s now plausible that the yield in the 10’s move back to the 1.58%

This translates into a Long entry point for U.S. financial and cyclical equities……..and also for some selected commodities such as Brent Crude, Soybeans, Sugar, maybe Corn, perhaps Platinum and certainly Copper.

For the past 2 weeks, the media has been heralding the end of the ‘reflation trade’. It should prove to be momentary.

If one is interested and ‘ballsy’, rising yields in the 10’s should provide a short trade for your high price to revenue stocks. Think Peloton, Snap, Pinterest etc.

* not personal advice…do your own work or seek professional advice

July 9, 2021

by Rob Zdravevski

rob@karriasset.com.au