Vlad Demochko
The US bond market is seeing a decline coupled with higher yields again. By now, the 10-year bond yield has hit the 4-week high. The yield is currently around 2,64%. This is the highest yield since May 12th.
The sellout was triggered by the auction held by the US Treasury, which ended up with placing 3-year bonds to the amount of $28bn. According to the official sources, the Treasury is going to place $62bn in Treasury bonds this week. The latest auction is only a part of the entire offer, Market Leader report.
The market was affected by the auction due to the fact that a certain part of the liquidity was absorbed. On the investors' side, there is also a chance that the Fed may near the edge when the QE program is tapered to the end, which will be followed by an increase in the federal fund rates.
The latest auction indicated the demand 3,41 times as high as the supply. This is above the average of 3,37. Foreign central bank purchases reached 26,5% of the emission.
It should also be noted that some investors question the US economic growth, which was instantly priced into the bond market. The US bond market has been going down for 2 months amid higher yields.
Today, on June 12th, the USD index keeps trading higher against a basket of 6 other major currencies. The mid-term bias is bullish. The price has already hit 81,01, Masterforex-V Academy reports. The closest major level of resistance is 81,42 while the key support is located at 80,270.
Vlad Demochko
