A pick up in inflation, growth and Fed rate hikes have pushed Treasury yields higher. The US 10 year yield broke above important levels yesterday and seems to continue going higher.
This is feeding into the real economy. Mortgage rates are going up and savers can actually get some interest on their money. Equities reacted to the recent spike in the US 10 year yield with selling off.
The US 10 year broke above the 3.1% in a violent fashion.
The often referred to US vs German 10 year spread has spiked over past sessions and is trading at 268. US versus Europe is definitely a tale of two stories.
The S&P future trades lower today. The big level is down at 2900, but the fact we didn’t see the index take out recent highs should be a small sentiment red alert.
The fear index, VIX, is reacting with a small pop higher in pre market trading today, but is still at relatively low levels.
Gold has lost its shine over past years, but note the recent upticks. Maybe after all gold could revive as an asset to own when prices of various other macro assets start moving. Gold is just at the negative trend line and trades right at the 50 day average. Given the fact investors seem to hate the precious metal, we could be setting up for an interesting move from here.
Source: charts by Bloomberg