The 10Y tagged our next downside (yellow) target yesterday, the trend line from the Aug 2020 lows, trading as low as 1.352%. In reaching those lows, it actually broke below both the trend line and the bottom of the falling white channel it’s been locked in since mid-March.
This target has been on our radar since March, when we plotted it in anticipation of a blowout April CPI print. We got the print (4.16%) but the market’s downturn was limited and short-lived, resulting in a gentler, more carefully governed decline than we originally anticipated.
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