US: 10-year bond yields set to rise through Q3 – Credit Suisse

US 10-year Bond Yields remain above key uptrend resistances and a rising 200-day average, suggesting the medium term uptrend remains intact, with a break above 1.64/645% later in the quarter needed to confirm a resumption of this uptrend.

Medium-term yield uptrend remains intact

“We expect yields to end Q3 at meaningfully higher levels, with the next key supports at 1.585/595%, then 1.635/645%. Above here would confirm that the Q2 fall is corrective only within an ongoing uptrend. Thereafter, an eventual break above 1.775/82% would still suggest we are seeing the formation of a large yield base. If confirmed, which is our bias, this should see a move to our next core medium term objective at 1.965/2.00%, then 2.16/18%.”

“Near-term resistance is seen at 1.35%. The maximum correction we can envisage is a move towards 1.295/285%, however this is not our base case. Importantly, a corrective move lower would still be viewed as part of a longer term basing effort.”