US 10-year Treasury yield hits lowest since US elections

The yield on the benchmark 10-year Treasury fell to 2.027% yesterday; the lowest level since US elections. At press time, the yield traded at 2.046%. 

The yield looks set to test 2% and could drop to 1.982%, which is the 50% Fib retracement level of the rally from 1.321% to 2.642%. The decline in the treasury yields is bearish for the US dollar and vice versa. 

The long duration yield is clearly tracking the weak inflation, which as per most Fed policymakers is structural and somewhat surprising. The curve or the spread between the US 10-year yield and the 2-year yield currently stands at 77.8 basis points.