Tomorrow with the release of the CPI at 8:30 am CST we could see a breakout of the 10 year treasury yield. To us a breakout will be a close for the day above 2.90% and of course only a stones throw from the 3% mark.
The expected range on the CPI is 1.9% to 2.3% and we can expect this breakout to occur if the reported rate is above the top end of consensus.
Investors need to once again be positioned correctly–we know we sound like a broken record. “Correctly” means understanding the loss of capital that comes with higher rates and perpetual securities.
Of course if investors want to change positioning there are just 35 minutes left to do it prior to the CPI release.
On the other hand maybe the number tomorrow will be soft in which case the 10 year treasury will temporarily fall back to the 2.80% level.