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BENCHMARK TREASURY YIELD KNOCKS ON THE BREAKOUT DOOR

Treasury yields are surging on Friday, with the U.S. 10-year Treasury yield US10YT=RR hitting about 4.58% -- its highest level in a year. The move comes as rising oil prices raise fresh concerns that disruptions in the Middle East could keep inflation elevated, especially after this week’s data showed a jump in price pressures in April.

From a technical standpoint, that 4.58% level matters. It lines up with the top end of a multi-year consolidation pattern -- a zone that could act as resistance or, if broken, open the door to a sharper move higher.

Volatility has been steadily fading, often a setup for a bigger breakout. So if the 10-year yield clears roughly 4.58% to 4.61% -- where its upper monthly Bollinger Band also sits -- it could accelerate quickly. That would bring prior highs into view, including around 4.81% from January 2025 and the 5% area, near the upper yearly Bollinger Band and the October 2023 peak at 5.021%. The June 2007 high at 5.333% stands further out as a longer-term reference point.

That said, yields would need to cool off soon to stay within their recent range. On the downside, support sits around 4.48% to 4.44%. A drop below the 20-month moving average, near 4.25%, would signal that pressure is easing and the trend may be turning lower.

(Terence Gabriel)

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