Trump effect on US long rates : A good entry point ? Yes but Sell STOP above 2,50%.

10 Years Treasuries from 1,80% before election to > 2,30% today.

This move represents around 5% in price on the bond price .

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10 Years Treasuries LONG term chart :

Yields are back to the top of the downtrend line that contained (around 6 touching points) yields surges in last 10 Years : The 2,35-2,40 range is significant barrier to the upside .

Bonds markets are extremely oversold at current levels and I do not believe these resistances (2,40 ultimately 2,50%) will be broken at this stage . If despite of strong resistance 2,50% is broken on the upside more bonds investors would take the exit door and quickly drive yields in the 3 % area.

In this latter case, equities markets would definitely  start to be vulnerable.

10 Years Treasuries minus 2 Years Treasuries :

Curve steepening since election : spread increase of 25 BPs since election and even 50 BPs since september shows market expectation of increased inflation and improved economic outlook and explains strong Financials stocks performances recently.

curve-steepening