December 10-Year Treasury Note Sell-Off
The US 10-year treasury note is being sold off in December.
The rise in rates has sent bond prices lower. However, from a cycles standpoint, the prospects for the 10-year note look promising. Rates tend to rise and fall in cycles, and we are currently in a period of rising rates.
Currently, the most active cycles are 363, 242, and 89 days. The combination of this trio is plotted below, and note that the cycle composite coincided with the August high. The cycle bottoms at the end of September, projecting a rally in October and another decline into December.
The Three-Cycle Note Composite is a new way to create music.
It looks like the bearish scenario is playing out as expected, with prices falling back below the key 111-112 level. This is a bearish development and could mean further downside in the days and weeks ahead.
The monthly note price is an important indicator of the health of the economy. It is a measure of the average cost of borrowing money for one month.
