US 10-year yield: Third consecutive weekly gain - BBH

The analysis team at BBH note that the US 10-year yield rose for the third consecutive week and the yield has risen from 2.16% on April 18 to almost 2.38% after the April jobs data. 

Key Quotes

“The 2.40% area is the next threshold.  It is the halfway point of the decline since the March 14 peak (~2.63%).   Better retail sales and an increase in CPI could help underpin yields.   The June note futures pushed through the 38.2% retracement of its rally since the day before the March FOMC meeting (~125-03) and stopped shy of the 50% retracement (seen near 124-20).  The technical indicators are mixed.  The MACDs are headed lower, but the Slow Stochastics appear to be trying to turn higher.”

“The S&P 500 eked out a small gain on the week, which was sufficient to extend the advancing streak for the third week, and set a marginal new record high.  A break of 2380 would be significant and would point to a near-term top being in place.  On the downside, the gaps left from higher opening on April 24 and April 25 may draw prices.  The gaps are found roughly between 2356.2 and 2369.20 and 2377 and 2381.  The Slow Stochastics and MACDs are rolling over.    The VIX briefly fell below 10.0% on May 1 to record its lowest level since before the Great Financial Crisis.”