10yr yields weren’t able to break convincingly below 2.72% after multiple attempts in the previous week. Friday’s final attempt was definitively crushed by Tuesday’s big sell-off to open the holiday-shortened week. The bounce jives with our expectation for sideways momentum to take the place of May’s rally trend, but “sideways” is open to quite a bit of interpretation. Yields could rise well above 3% even if broader momentum remained sideways. They could also be content with lower ceilings. To that end, each instance of technical support gives us a potential ceiling to consider. With yields avoiding a break above yesterday’s highs so far today, we already have our first candidate in 2.88%.
Today’s only big ticket economic data is ISM Manufacturing at 10am ET.
Source: Mortgage News Daily