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Significant Rise in US Treasury Bond Yields Across Various Terms

By Samir Al Khoury,

US Treasury bond yields of various terms rose significantly, with the two-year bond yield reaching 5.002% yesterday, its highest level since May 1, 2024. Similarly, the ten-year bond yield recorded 4.638% yesterday, its highest level since May 3, 2024.

The two-year bond yield is highly sensitive to federal monetary policy. Several factors have contributed to the upward momentum of this short-term yield:

  • Weak demand for US Treasury bonds issued by the US Treasury.

  • Hawkish statements by some Fed members, hinting that interest rates will remain high for a longer period.

  • The strength and flexibility of the American economy, with most economic indicators exceeding analysts’ expectations. For instance, the consumer confidence index recorded 102 points two days ago, surpassing expectations (96.0) and the previous reading.

Today, analysts are closely watching the release of the GDP index, which is expected to record a 1.6% increase on a quarterly basis, lower than the previous reading of 3.4%. Additionally, the core personal consumption expenditures (PCE) price index, a crucial indicator preferred by the US Federal Reserve, will be released tomorrow. Expectations indicate it will record a 0.2% increase on a monthly basis in April, lower than the March reading of 0.3%.

Therefore, caution is advised. Any higher-than-expected readings for both GDP and PCE indicators could positively impact the US dollar and US Treasury bond yields, and negatively affect stocks, bonds, and commodities, specifically gold, due to the inverse relationship between the dollar and other financial instruments.

Technically, the momentum appears positive for the two-year bond yield, according to the Relative Strength Index, currently at approximately 59 points. According to Fibonacci analysis, the two-year bond yield is likely to rise to levels of 5.016% (78.60%) and 5.259% (100.00%).

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.

Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.

Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.

Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.

Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.

*All trading involves risk

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