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U.S. equity index futures decline: Nasdaq 100 off ~0.7%
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U.S. Jan import prices MM -0.2% vs -0.2% est; export
prices MM
+0.8% vs -0.2% est
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Euro STOXX 600 index down ~0.4%
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Dollar up; gold dips; crude, bitcoin both fall ~3%
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U.S. 10-Year Treasury yield rises to ~3.89%
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U.S. 10-YEAR TREASURY YIELD HITS A MORE THAN 3-MONTH HIGH
(0900 EST/1400 GMT)
The U.S. 10-Year Treasury yield has hit its
highest level since early-November. With this, U.S. equity index
futures are lower on fears that accelerating inflation in the
face of a sturdy U.S. economy could prompt the Federal Reserve
to err on the side of caution by keeping monetary policy
restrictive through the year.
The yield hit a high of 3.9290%, and is on track to rise for
a fourth-straight week:
That said, it has since backed away to around 3.89%. There
is yield resistance in the 3.9050%-3.98% zone which includes the
late-December 2022 high, a weekly Gann Line (now around 3.94%),
and the 23.6% Fibonacci retracement of the 1981-2020 yield bear
market at 3.9765%.
This zone has the potential to cap this latest yield rise. In that event, the yield could once again chop its way back down to the 3.50%-3.30% area as a number of weekly Gann Lines are providing yield support in this zone. The yield's mid-January trough was at 3.3210%. A thrust above 3.98%, confirmed by the weekly close, however, can put traders on guard for the yield to challenge the 4.25%-4.3380% area. This zone includes another weekly Gann Line as well as the October 2022 high. The 4.3380% mark was the highest level since November 2007. The 4.3380% level protects against the potential for a further rise to the 5% area. Coming under 3.3210% would instead potentially refocus on the 2.5160% early-August 2022 trough.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
