The Treasury market is the best measure of tapering fears and today’s jobs numbers created a scare.
Yields on 10-year notes are up 14 basis points to 2.74%, a shade below the October intraday high. It has been a technical trade in bonds since April when the market first warmed up to a taper.
Interestingly, the anti-taper decision from the Fed in September hardly sent bond yields down to the lows. Part of the reason is the optimism in stock markets but yields are now set to close above the levels when the Fed tapered in September.
Technically, the bounce from the 38.2% retracement and the close above the 55-day moving average both point to a further rise.
US 10 year yields daily w 55dma
For me, I won’t say there is a more than 50% chance of a taper in December until yields hit 3%.
