The US 10-year yield has continued higher this week and is now very close to key support at 1.685/705%. A major base looks increasingly imminent. Economists at Credit Suisse look for a move above 2% into 2022.

A sharp rise in yields is likely

“US 10-year Bond Yields are back pressuring key long-term support at 1.685/705% after medium and long-term moving averages recently posted a bearish “death cross”, which pointed to a further deterioration in the trend following setup. Furthermore, short-term momentum is reaccelerating and weekly MACD remains outright bearish.”

“We believe a breakout above major support at 1.685/705% may be imminent, which would confirm a three-year basing structure, which would very likely take us above the year-to-date highs and retracement support between 1.775% and 1.82%.”

“Going into 2022, we maintain our long-held view that a move to 1.965/2.00% is likely in the first quarter, followed by retracement support at 2.16/18%.”

See: US 10-year Treasury yield could reach 2.05/10% on a break above 1.80% – SocGen