Both the US 10-year yield and the US 30-year yield both hit and bounced off their respective 76.4% pullback levels.
However, I am still biased that we are trading in a fashion very similar to March-May 2024 and that argues that any bounce in yields could be short-lived (and maybe has even already run its course)
This chart together with my weekend Diary note, Diary Week 80: The Death Of Inflation, makes me believe that yields are in fact turning and will head lower in the weeks and months ahead
This likely feeds back to FX and yield spreads
I already mentioned in my piece If The Shoe FITZ: Charts Of The Week on Friday that the medium-term technical picture was starting to look very shaky for the USD- Particularly when looking at the BBDXY Index, USDCNH and USDCAD. The first two are looking very similar to Jan 2017 (Trump 1.0) while USDCAD is following a path like it did in 2016 and 2020 at the highs.
Well, we could also be seeing EURUSD head in that direction.
It is now back above the 1.0448-1.0458 breakdown level and would post a bullish outside month on a close over 1.0533
Bullish outside months are also possible on
AUDUSD above .6331
NZDUSD above .5723
While a bearish outside month is possible on USDMXN below 20.13
On the fact of it this equity market chart looks quite constructive
It is the Eurostoxx 50 index which hit a trend high last week and is up over 125 this year.
However, it just touched and failed to break the March 2000 high on its first test in a quarter of a century last week.
Even If we get a temporary break here caution could still be warranted as there is a danger that a marginal new high and then turn lower could complete triple momentum divergence on the monthly chart and suggest a major top is in
Other interesting charts are WTI, Copper, European natural Gas , Gold, HSCEI...all of which were covered in Friday in If The Shoe FITZ: Charts Of The Week
