The move being the pullback in long-term yields this morning, which would be in line with our view of disinflation and a pivot toward the favored counter-cyclical 2023 view as bonds stop pulling back (yields stop rising) and resume their fledgling rally. Generally, let’s keep an eye on the 50 day average. The 30yr yield is dropping below it to open 2023 and as the economy eases along with the inflation that initially drove it, we’re looking for that to continue.
Recall how the monthly ‘Continuum’ view of the yield was shown to drop to clear support before this bounce. The bounce – during Santa season as it is – was always going to happen. Now we should find out if the trend in bond yields will break down or resume. I’m expecting lower yields to come, which as we’ve noted could instigate some Goldilocks good feelings before ‘dis’ morphs to something more like ‘de’ flation.