Rates Trapped — Oil Dictates The Next Move

4.3% holds - range lives on

US 10 year reversed right on the huge 4.3% resistance. Add it to another asset stuck in a strong range.

Source: LSEG Workspace

 

Still compressing

The US 10 year continues trading inside the huge triangle like formation, but this is not breaking out until much later.

Source: LSEG Workspace

 

Vol led the move

Bond volatility started rising before the latest rate spike. The move has been violent, so a pause looks likely, unless the Iran situation spirals further.

Source: LSEG Workspace

 

Oil = the anchor

Oil is off its panic highs, but if it remains elevated, it’s hard to see rates moving meaningfully lower from here.

Source: LSEG Workspace

 

Cracks in correlation

Rates have moved closely with oil, but the 10-year has started to decouple.

Source: LSEG Workspace

 

Bund rejection

The German 10-year yield reversed right at the key 3% level, aligning with both the 2023 peak and the upper bound of the trend channel.

Source: LSEG Workspace