HALISTER1: U.S. Treasury Yield May Drop to 1.85% on Syria Strike: Triple T

U.S. Treasury Yield May Drop to 1.85% on Syria Strike: Triple T

(Bloomberg) -- Treasury 10-year yield may drop to as low as 1.85% depending on Russia’s response to the U.S. strike on Syria and on any signs of further actions from the U.S., says Sean Keane, an Auckland-based analyst at Triple T Consulting.
  • 10-year Treasury yield is now exploring support around 2.30% that goes back to last November
    • If the yield falls below 2.28%, technical stops will be triggered and the market will target 2.20% and potentially 1.85% as that was the level where the Trump trade started
  • Whether such a move occurs depends partly on Russia’s response to the U.S. strike, and on any sign from the U.S. that further action might be forthcoming
  • Market is holding at current levels ahead of the European open because at this stage the U.S. is indicating it’s a single, proportional response while Russia is silent
  • Strike will probably force China President Xi to abandon the view that Trump is a determined isolationist
    • The Chinese will have to consider Trump’s demands for immediate action on North Korea much more seriously
  • NOTE: 10-year Treasury yield fell as much as 5bps to 2.287%, lowest since Nov. 22

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Sean Keane (Triple T Consulting)

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