Much of Friday’s increase in yields was associated with perceptions of growing economic strength and possible impacts on inflation
What a difference a long weekend makes as the majority of sellers rode off into the sunset and have not returned to rule the day as they did on Friday. Selling late last week eliminated some bullish signals off our current trend that had been established earlier this month. The drop did however find some support at the 21-day moving average at 118-055, which is also where an up-sloping trend line off the August/September lows lies. The reaction to that area suggests that selling momentum is unlikely to immediately build on the shift away from the bullish camp. Much of Friday's increase in yields was associated with perceptions of growing economic strength and possible impacts on inflation.