Today’s reflation trade on Trump’s tax reform proposal and the durable goods report for August (up 1.7% versus 0.7% consensus) have adjusted a few technical relationships. The first I’d like to mention is the 10-year Treasury.
Ever since the CPI report was released a couple of weeks ago, rates have been creeping higher along with expectations for the Fed to go again in December (from 30% probability before the CPI to currently 76.4%). It appears rates may be bullishly inflecting. Note the blue circle highlighting the breakout above the red declining trendline:
This post was published at FinancialSense on 09/27/2017.
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