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12/3/2016: Bond Yields – Near Term Exhaustion

Yield on 30 Yr. U.S. Treasury Bond Yield Weekly

tyx-12-3-2016-weekly

The 30 year Treasury Bond yield has rallied 44% in 21 weeks (the low was 21 weeks ago and I’m using weekly closing prices). This is the same rate of change that was registered in June 2015, which was the most recent peak. The only larger rate of change (since 1981) was the 68% rally after the financial crisis into May 2009. Yield topped 4 weeks later. There is something about a nearly 50% move in 21 weeks; the lowest rate of change recorded was -45% during the financial crisis. That week’s reading was the low. Needless to say, the move in yield is extreme and I’m looking for a turn lower. Watch for support in the 2.6s.  The associated move in the USD (higher), particularly against JPY, will likewise face headwinds.

-JS

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