Today the auction of 10 yr treasuries will be interesting to watch. The reason being is because the Fed can get involved at certain psychological levels just to send a signal to the market. Presently the 10 yr note is battling the 200 mda and at this moment is acting as if the Fed is in there buying. With an auction later today why else would the 10 yr being acting like it is with additional supply coming online in a couple hours from now.
On the other hand, if the yield goes up from here breaking through resistence, it might signal the Fed is going to allow rates to go up to 2% or beyond.
This may seem odd to those who think the Fed must buy $85 billion per month, but actually the Fed buys much more than $85 B monthly because they also soak up enough to cover runnoff. In the past several months they've been buying almost $85B in just MBS alone, so if they were to curtail their purchases to the stated goal of only $85B then the 10 year yield will be going up in theory.
the ten year treasury buted through the 200 mda, or used it as a launch pad more like it. I have very little doubt tha the 10 yr treasury wil be up above 2% before the end of May.... that is unless our housing industry stays in the dulldrums leadng ou economy to remain at stall speed.