One of the most important charts that any trader can follow is the 10-year U.S. Treasury yield. When yields move higher, it means that bond prices move lower. Understanding this, if you are following an equity like the iShares Barclays 7-10 Year Treasury Bond Fund (IEF), or the iShares Barclays 20+ Yr Treasury Bond (ETF) (TLT) you should realize that yields will move inversely to these equities. When bond yields move higher it will usually have a negative effect on the interest rate sensitive sectors such as utilities, REITS, home-builder stocks, and many consumer staples.
Today, the yield on the 10-year U.S. Treasury bond surged above 2.4 percent. This looks to be a breakout move on the yields today. At these levels, yields are getting extended and may pullback in the near/short term. However, any consolidation pattern on the yield chart would signal further upside in the bigger picture. It would not be surprising to see another 50 basis point move in the yield on the 10-year U.S. Treasury Note. Some ETF's that will trade higher with bond yields include the ProShares UltraShort 7-10 Year Treasury (ETF) (PST), and the ProShares UltraShort 20+ Year Treasury (ETF) (TBT). Understand what moves with and inverse to the yields and profit from it.
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Bond Yields Seal The Deal
Published 06/20/2013, 04:17 AM
Updated 07/09/2023, 06:31 AM
Bond Yields Seal The Deal
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